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NWS Holdings Limited(incorporated in Bermuda with limited liability)

28/F New World Tower18 Queen’s Road CentralCentral, Hong Kong

Tel : (852) 2131 0600Fax : (852) 2131 0611E-mail : [email protected]

www.nws.com.hk

Connecting Lives Building Futures

Interim Report 2017-2018

NWS HOLDINGS LIMITEDSTOCK CODE: 659

1 Financial Highlights

2 Chairman’s Statement

4 Management Discussion and Analysis

12 Independent Auditor’s Review Report

13 Interim Results

50 Interim Dividend

51 Disclosure Pursuant to Rule 13.22 of the Listing Rules

52 Additional Information

60 Corporate Information

CONTENTS

Download the NWS HoldingsInterim Report 2017 - 2018

To build a dynamic

and premier group of

infrastructure and service

management companies

driven by a shared

passion for customer

value and care

VISION

INTERIM REPORT 2016-2017INTERIM REPORT 2016-2017 111

Financial Highlights

INTERIM REPORT 2017-2018 1

For the six months ended31 December

2017 2016

HK$’m HK$’m

Revenue 18,076.9 13,846.0

Profit attr ibutable to shareholders of the Company 2,478.1 2,600.1

Basic Earnings per Share HK$0.64 HK$0.68

Dividend Payout Ratio 50% 50%

At At

31 December 30 June

2017 2017

HK$’m HK$’m

Net Debt 6,149.0 3,229.3

Total assets 79,249.0 75,725.9

Net Assets 48,873.6 49,275.0

Shareholders’ funds 48,653.3 49,057.1

Net Assets per Share HK$12.55 HK$12.67

Net Gearing Ratio 13% 7%

NWS HOLDINGS LIMITED2

Chairman’s Statement

Dear Shareholders,

On behalf of our board of directors (the “Board”),

i t i s my p leasure to present the f inanc ia l resu l ts

o f N W S H o l d i n g s L i m i t e d ( “ N W S H o l d i n g s ” o r

t he “Company ” , t oge the r w i t h i t s subs id i a r i e s ,

t h e “ G r o u p ” ) f o r t h e s i x m o n t h s e n d e d

31 December 2017 (the “Current Period”).

Decent Growth ProspectsT h e g l o b a l e c o n o m y c o n t i n u e d t o g a t h e r

momentum and demonstrate i ts res i l ience dur ing

2017. The advanced economies performed sol idly

as trading and investment activit ies thrived on the

back o f r i s ing consumer con f idence and len ien t

monetary condit ions. Major stock markets around

t h e w o r l d r e g i s t e r e d d e c e n t g a i n s u n d e r t h e

conf luence of sound corporate fundamentals and

ample l iquidity in the f inancial system. In addit ion,

m a n y e m e r g i n g c o u n t r i e s b e n e f i t t e d f r o m t h e

steady increase in export demands and commodity

prices. Nevertheless, the pace of monetary pol icy

n o r m a l i z a t i o n , u p b e a t a s s e t p r i c e t r e n d s a n d

widespread geopol i t ica l uncerta inty wi l l cont inue

to pose cha l lenges to the s tab i l i t y o f the g loba l

f inancial system.

China reversed the downward growth path which

b e g a n i n 2 0 1 0 b y d e l i v e r i n g 6 . 9 % g r o w t h i n

2 0 1 7 , b e a t i n g t h e o f f i c i a l t a r g e t o f 6 . 5 % . T h i s

l o n g a w a i t e d t r e n d r e v e r s a l b o d e s w e l l f o r t h e

fu tu re o f t he Ch inese economy and the Cen t ra l

Gove rnment ’ s e f fo r t i n d r i v i ng h igh-qua l i t y and

s u s t a i n a b l e d e v e l o p m e n t t h r o u g h c o o r d i n a t e d

econom ic po l i c i e s and manda tes . The Ch inese

au thor i t i es a re a l so expected to pe rseve re w i th

p o l i c i e s a n d m e a s u r e s t o a l l e v i a t e s t r u c t u r a l

imba l ances and enhance f i nanc i a l s t ab i l i t y . As

a n e x p e r i e n c e d a n d r e s o u r c e f u l i n f r a s t r u c t u r e

player, the Group is well posit ioned and equipped

to ident i fy and capture investment opportun i t ies

ar is ing f rom China’s promis ing growth prospects

and strong demands for infrastructure services.

In l ine with our long-term objectives in maintaining

s u s t a i n a b l e g r o w t h a n d c r e a t i n g s h a r e h o l d e r

values, the Group continued to deploy its capital to

optimize its returns. To this end, the Infrastructure

division capital ized on a number of value accretive

asset enhancement and divestment opportunit ies.

T h e i n v e s t m e n t i n S u i y u e n a n E x p r e s s w a y i n

cent ra l Ch ina ’s Hube i p rov ince in January 2018

is set to provide immediate impetus to boost the

performance of the Group’s Roads segment. The

commercial aircraft leasing business continues to

grow st rong ly as the combined a i rc ra f t por t fo l io

under the Group ’s l eas ing p la t fo rms su rpassed

100 aircraft in the last quarter of 2017. Fol lowing

a s t r a t eg i c r e v i ew on t he i n ves tmen t i n Be i j i ng

C a p i t a l I n t e r n a t i o n a l A i r p o r t C o m p a n y L i m i t e d

(“BCIA”), the Group unlocked its underly ing value

th rough a par t ia l d isposa l in January 2018. The

E n v i r o n m e n t s e g m e n t m a d e s o l i d p r o g r e s s i n

expanding i ts operat ion capabi l i t ies , par t icu lar ly

in the deve lopment o f techno log ica l l y advanced

waste incinerat ion and environmental remediat ion

projects to capital ize on the increasingly str ingent

environmental standards in Mainland China.

A g a i n s t p e r s i s t e n t h e a d w i n d i n t h e o p e r a t i n g

env i r onmen t , t he m i xed r esu l t s o f t he Se r v i ces

d i v i s i o n b e c a m e m o r e a p p a r e n t d u r i n g t h e

Current Per iod. Whi le the Construct ion bus iness

c o n t i n u e d t o p e r f o r m o n a s t r o n g f o o t i n g , t h e

Faci l i t ies Management segment registered a loss

fo r the f i r s t t ime . F ree Du ty ’s pe r fo rmance was

impac ted by s lugg i sh sa les and cos t p ressu res

amid soft tourist spending while Gleneagles Hong

Kong Hosp i ta l ( “GHK Hosp i ta l ” ) r ema ined i n i t s

ramp-up phase a f te r commenc ing opera t ions in

the latter half of the f inancial year ended 30 June

2017 (“FY2017”) . However, i t is p leas ing to note

that the Group has successful ly won the contract

fo r the operat ion o f Hong Kong Convent ion and

Exhib i t ion Centre ( “HKCEC”) Phase I I unt i l 2028.

Th i s enab l es t he G roup to con t i nue t o ope ra t e

this world class faci l i ty to help foster Hong Kong’s

t r a d e a n d c o n v e n t i o n b u s i n e s s . I n l i g h t o f t h e

gradually improving operating eff iciency in each of

these segments, the Group remains opt imist ic in

thwarting the downtrend of the Services division in

the not too distant future.

Chairman’s Statement

INTERIM REPORT 2016-2017INTERIM REPORT 2016-2017 3INTERIM REPORT 2017-2018 3

Performance ReviewA t t r i b u t a b l e O p e r a t i n g P r o f i t ( “ A O P ” ) g r e w b y

6% to HK$2.7 b i l l i on wh i le p ro f i t a t t r ibu tab le to

shareho lders fe l l by 5% to HK$2.5 b i l l ion dur ing

the Current Per iod. The remarkable AOP growth

o f 33% genera ted by the In f ras t ruc tu re d i v i s ion

endorsed the h igh leve l o f cap i ta l commi tments

in infrastructure assets, part icular ly in the Roads

a n d A v i a t i o n s e g m e n t s . O n t h e c o n t r a r y , t h e

S e r v i c e s d i v i s i o n r e p o r t e d a 3 4 % d e c l i n e i n

AOP resul t ing main ly f rom the contract ion of the

Faci l i t ies Management segment under the effect of

unfavourable business condit ions.

The decl ine in prof i t at t r ibutable to shareholders

ref lected the impact of non-recurr ing except ional

i t e m s . A s p r e v i o u s l y r e p o r t e d , t h e G r o u p

recognized gains of approximately HK$454 mil l ion

a n d H K $ 1 1 3 m i l l i o n f r o m t h e r e s t r u c t u r i n g o f

SUEZ NWS L imi ted ( “SUEZ NWS”) and upon the

ful l acquisit ion of NWS Transport Services Limited

(“NWS Transport” , together with i ts subsid iar ies,

t h e “ N W S T r a n s p o r t G r o u p ” ) r e s p e c t i v e l y

a n d a n i m p a i r m e n t l o s s o f a p p r o x i m a t e l y

HK$204 mil l ion in relation to Newton Resources Ltd

( “Newton Resou rces ” ) i n t he s i x mon ths ended

31 December 2016 (the “Last Per iod”). Excluding

t h e n e t c o n t r i b u t i o n f r o m t h e s e o n e - o f f i t e m s ,

profit attr ibutable to shareholders would have risen

nearly 11% in l ine with the AOP growth and finance

c o s t s a v i n g s f o l l o w i n g t h e r e d e m p t i o n o f U S D

bonds in February 2017.

T h e B o a r d i s p l e a s e d t o d e c l a r e a n i n t e r i m

dividend for the financial year ending 30 June 2018

(“FY2018”) of HK$0.32 per share, represent ing a

payout ratio of approximately 50%.

Corporate SustainabilityThe Group con t inues to s t r i ve fo r exce l l ence i n

co rpora te sus ta inab i l i t y by fos te r ing , among a l l

levels of staff, the business culture of transparency

and accountabi l i ty and address ing soc ia l needs.

T h e G r o u p ’ s f o u r t h s t a n d a l o n e S u s t a i n a b i l i t y

Repo r t pub l i s hed i n t he Cu r r en t Pe r i od has an

expanded scope cover ing businesses over which

t h e G r o u p h a s m a j o r f i n a n c i a l a n d o p e r a t i o n a l

control, and that are of environmental, social and

governance signif icance. On the community front,

w e h a v e e m p o w e r e d o u r c o r p o r a t e v o l u n t e e r s

and , toge the r w i th ou r c ross-sec to ra l pa r tne rs ,

i m p l e m e n t e d m e a n i n g f u l p r o g r a m m e s f o r t h e

benef i t of the community. I am del ighted that the

Group ’s e f fo r t has been w ide l y recogn i zed . We

have been selected as one of the const i tuents of

Hang Seng Corpora te Susta inab i l i t y Benchmark

Index for the seventh consecutive time, and named

the top winner in both the enterprise and volunteer

team ca tegor ies a t the Hong Kong Outs tand ing

Corporate Cit izenship Awards.

ConclusionThe global economic out look for 2018 is posit ive

a l t h o u g h c o n d i t i o n s w i l l r e m a i n m i x e d a c r o s s

different business sectors. The Group wil l continue

t o b u i l d o n o u r s t r e n g t h s a n d r e m a i n f o c u s e d .

We a re commi t t ed t o d r i v i ng qua l i t y g row th by

leveraging our uniquely diversif ied asset base, solid

capital structure and strong brand posit ioning.

F ina l l y , I wou ld l i ke to thank the Board fo r the i r

exempla ry l eadersh ip and a l l ou r co l l eagues fo r

the i r hard work and determinat ion in mainta in ing

the highest standard of excel lence. I also wish to

take this opportunity to extend my appreciation to

our shareholders and business associates for their

trust and continued support.

Dr Cheng Kar Shun, HenryChairman

Hong Kong, 26 February 2018


Management Discussion and Analysis

GROUP OVERVIEWThe Group recorded an AOP of HK$2.682 b i l l ion for the Current Per iod, represent ing an increase of

HK$162.7 mi l l ion or 6% compared with HK$2.519 bi l l ion in the Last Per iod. Propel led by the organic

growth across the board, especia l ly the Roads and the Aviat ion segments, the Inf rastructure d iv is ion

generated an AOP of HK$2.025 bi l l ion, representing an increase of 33% when compared with HK$1.525

b i l l ion in the Last Per iod. On the other hand, the AOP of the Serv ices d iv is ion decreased by 34% to

HK$656.8 mil l ion, compared with HK$994.7 mil l ion in the Last Period. The decl ine in f inancial results of

the Services division in the Current Period ref lected the underperformance of the Faci l i t ies Management

segment which, for the first t ime, reported a loss as Free Duty’s business remained sluggish and the newly

opened GHK Hospital incurred start up costs during the ramp-up phase.

The profit attr ibutable to shareholders decreased by 5% to HK$2.478 bi l l ion reflecting the reduction in net

contribution from exceptional non-cash items, in particular, the recognit ion of a gain of HK$454.3 mil l ion

upon the restructuring of SUEZ NWS following asset injections by both shareholders and a remeasurement

gain of HK$113.1 mil l ion in relation to the previously held equity interest in NWS Transport when the Group

assumed ful l control after acquir ing the remaining 50% interest from the former joint venture partner in

the Last Per iod even though these gains were part ly of fset by an impairment loss of HK$204.0 mi l l ion

on the mining assets of Newton Resources, a then associated company of the Group. Excluding the net

contr ibut ion from these one-off i tems, prof i t attr ibutable to shareholders would have r isen near ly 11%

which was in l ine with the AOP growth and f inance cost savings fol lowing the USD bonds redemption in

February 2017.

Contribution by DivisionFor the six months ended 31 December

2017 2016

HK$’m HK$’m

Infrastructure 2,025.3 1,524.7

Services 656.8 994.7

Attributable operating profit 2,682.1 2,519.4

Corporate office and non-operating items

Gain on fair value of investment properties 55.0 71.8

Net gain on disposal of projects 38.8 68.1

Gain on restructuring of a joint venture – 454.3

Gain on remeasurement of previously held equity interest in a joint venture – 113.1

Impairment loss related to an associated company – (204.0)

Interest income 18.1 38.4

Finance costs (126.6) (257.1)

Expenses and others (189.3) (203.9)

(204.0) 80.7

Profit attributable to shareholders 2,478.1 2,600.1



GROUP OVERVIEW (continued)

Contribution by Division (continued)Contr ibut ions f rom the operat ions in Hong Kong accounted for 34% of the AOP in the Current Per iod

compared with 50% in the Last Period. Mainland China and Others contributed 55% and 11% respectively

in the Current Period, compared with 43% and 7% respectively in the Last Period.

Earnings per shareThe basic earnings per share was HK$0.64 in the Current Period, representing a decrease of 6% from

HK$0.68 in the Last Period.

Treasury management and cash fundingThe Group’s funding and treasury policy is designed to maintain a diversif ied and balanced debt profi le and

financing structure. The Group continues to monitor its cash flow position and debt profi le, and to enhance

its funding cost-eff iciency with a central ized treasury function. In order to maintain f inancial f lexibi l i ty and

adequate l iquid i ty for the Group’s operat ions, potent ia l investments and growth plans, the Group has

bui lt a strong base of funding resources and wil l continue exploring cost-eff icient ways of f inancing. As at

31 December 2017, the Group had unuti l ized committed banking faci l it ies of approximately HK$7.4 bil l ion.

Liquidity and capital resourcesAs at 31 December 2017, the Group’s total cash and bank balances which were mainly denominated in

Hong Kong Dol lar and Renminbi amounted to HK$6.421 bi l l ion, compared with HK$6.453 bi l l ion as at

30 June 2017. The Group’s Net Debt as at 31 December 2017 was HK$6.149 bi l l ion, compared with

HK$3.229 bi l l ion as at 30 June 2017. The increase in Net Debt was mainly due to the distr ibution of f inal

and special dividends, the investments in associated companies and joint ventures, net of operating cash

inf lows and dividends received. The capital structure of the Group was 20% debt and 80% equity as at

31 December 2017, compared with 16% debt and 84% equity as at 30 June 2017. The Group’s Net Gearing

Ratio, being Net Debt to total equity, increased from 7% as at 30 June 2017 to 13% as at 31 December

2017.

Fue l pr ice swap cont racts are used to hedge aga inst fue l pr ice r ises, and fore ign exchange forward

contracts are used to hedge against foreign currency exposures of the Group’s Transport business.

Debt profile and maturityAs at 31 December 2017, the Group’s Total Debt increased to HK$12.570 bil l ion from HK$9.683 bil l ion as

at 30 June 2017. The Group has spaced out its debt maturity profi le to reduce refinancing risks. Among the

non-current portion of the long-term loans and borrowings of HK$11.461 bi l l ion as at 31 December 2017,

28% wil l mature in the second year, 67% wil l mature in the third to f i fth year and 5% wil l mature after the

f i fth year. Bank loans were denominated in Hong Kong Dollar or Renminbi and mainly bearing interest at

f loating rates. Interest rate swaps are used to hedge against part of the Group’s underlying interest rate

exposures. The Group did not have any material exposure to exchange risk other than Renminbi during

the Current Period. As at 31 December 2017, intangible concession rights of Hangzhou Ring Road were

pledged as securit ies for a banking faci l i ty of the Group.

CommitmentsThe Group ’s to ta l commi tmen ts fo r cap i t a l expend i tu re we re HK$2 .533 b i l l i on as a t 31 December

2017, compared with HK$1.952 bi l l ion as at 30 June 2017. These comprised commitments for capita l

contributions to certain associated companies and joint ventures and properties and equipment. Sources

of funds for capital expenditures include internal ly generated cash and banking faci l i t ies.

Financial guarantee contractsFinancial guarantee contracts of the Group were HK$4.075 bi l l ion as at 31 December 2017, compared

with HK$3.589 bil l ion as at 30 June 2017. These comprised guarantees for banking facil it ies of associated

companies and joint ventures.



OPERATIONAL REVIEW – INFRASTRUCTUREAll segments under the Infrastructure division, particularly the Roads and the Aviation segments, recorded

an increase in pro f i t cont r ibut ion dur ing the Current Per iod. AOP of the In f rast ructure d iv is ion grew

signif icantly by 33% to HK$2,025.3 mil l ion for the Current Period.

AOP Contribution by SegmentFor the six months ended 31 December

2017 2016 Change %

HK$’m HK$’m Fav./(Unfav.)

Roads 1,027.8 733.2 40

Environment 293.8 256.4 15

Logistics 338.5 316.1 7

Aviation 365.2 219.0 67

Total 2,025.3 1,524.7 33

RoadsAOP from the Roads segment rose by 40% to HK$1.028 bi l l ion in the Current Per iod along with r is ing

urbanization and economic activit ies in Mainland China which contr ibuted to the Group’s road portfol io

registering a 10% growth in dai ly traff ic f low as well as contribution from exchange rate movements.

Average dai ly traff ic f low of Hangzhou Ring Road increased by 5%, ref lect ing the increase in long-haul

truck traff ic which grew alongside the r ise of onl ine sales.

Ave rage da i l y t r a f f i c f l ow o f Tang j i n Exp ressway ( T i an j i n No r t h Sec t i on ) i nc r eased by 17% as t he

expressway capital ized on the r ising economic activit ies across the region under the Beij ing-Tianj in-Hebei

integration plan. Tol l revenue grew notably by 30% mainly due to the traff ic growth and the r ise in truck

traff ic since mid-2017 when certain expressways in Beij ing and Tianj in introduced traff ic control measures

to proh ib i t heavy veh ic le pat ronage. AOP growth in the Cur rent Per iod was a lso a t t r ibu tab le to the

non-recurrence of a one-time exchange loss on the shareholder’s loan which was recognized in the Last

Period.

Most of the Group’s expressways in the Pearl River Delta Region continued to del iver both traff ic volume

and tol l revenue growth during the Current Period. Average dai ly traff ic f low of Guangzhou City Northern

R ing Road and Be i j i ng-Zhuha i Expressway (Guangzhou-Zhuha i Sec t ion ) i nc reased by 9% and 11%

respectively. Traff ic f low of Shenzhen-Huizhou Expressway rose by 14%. Supported by the development of

high-speed train service at Guangzhou South Railway Station as well as economic development of Panyu

and Nansha distr icts, average dai ly traff ic f low of Guangzhou Dongxin Expressway and Guangzhou City

Nansha Port Expressway rose by 18% and 11% respectively. Due to traffic diversions following the opening

of new expressways in December 2016, traff ic volume of Guangzhou-Zhaoqing Expressway dropped by 7%

during the Current Period.

During the Current Period, the Group wound up certain subsidiar ies in Guangxi after disposals of their

respective concession rights in prior year and recorded exchange gains upon return of registered capital.

In Hong Kong, the average dai ly traff ic f low of Tate’s Cairn Tunnel grew by 2% during the Current Period.



OPERATIONAL REVIEW – INFRASTRUCTURE (continued)

Roads (continued)I n January 2018 , the Group success fu l l y ex tended i t s foo tp r in t i n to Hube i p rov ince by acqu i r i ng a

30% interest in Suiyuenan Expressway for a cash considerat ion of approximately RMB1.1 bi l l ion. The

concession rights of this 98.06 km long dual 2-lane expressway wil l expire in 2040. As a ful ly-operational

expressway in the central region of Mainland China, this project is expected to provide immediate AOP

contribution to the Group.

EnvironmentAOP of the Environment segment increased by 15% to HK$293.8 mi l l ion, which was mainly due to the

recognit ion of a fa ir value gain from Chongqing Si l ian Optoelectronics Science & Technology Co., Ltd.

during the Current Period.

The enlarged portfol io of SUEZ NWS provided a broadened income base to the Group. The hazardous

waste incinerat ion plant in Shanghai Chemical Industr ia l Park continued to post encouraging operat ing

per formance af ter the commencement of the th i rd product ion l ine in March 2017. Notwi thstanding a

10% rise in water sales and wastewater treatment volume, AOP contr ibut ion from SUEZ NWS dropped

sl ightly mainly due to the r ise in its corporate expenses, pre-operating and development costs as well as

the di lut ion effect of the Group’s effective interest from 50% to 42% in the Current Period. Several new

sewage treatment investments in Jiangsu, Hainan and Shaanxi with a total daily capacity of 57,000 m3 were

secured by SUEZ NWS during the Current Period.

Chongqing Derun Environment Co., Ltd. recorded an AOP growth in the Current Period which was driven

by the organic growth in waste incineration treatment volume and the receipt of a lump sum value added

tax subsidy. The recent successes in securing a r iver and a land remediation contracts in Chongqing wil l

strengthen its market presence in this emerging industry.

The upward trend in coal price has continued to erode the prof itabi l i ty of the Group’s coal-f ired power

p lants. Combined e lectr ic i ty sa les volume of Zhuj iang Power Stat ion – Phase I I and Chengdu J intang

Power Plant dropped 3% amid competit ion from hydro-power plants during the Current Period. AOP of

Guangzhou Fuel Company decreased as the trading margin t ightened due to the phasing out of outdated

product ion capaci ty which constra ined coal supply and the mount ing compet i t ion in the downstream

market with sizable coal miners launching direct sales business. Such impact was partial ly mit igated by

the abi l i ty in boosting sales volume through the expansion of service network and cl ient base during the

Current Period.

LogisticsAOP from the Logistics segment increased by 7% to HK$338.5 mil l ion in the Current Period.

ATL Logistics Centre continued to provide signif icant and stable AOP to the Logistics segment. Its average

rental rate grew moderately by 4% whi le occupancy rate dropped sl ight ly from 97.2% to 96.3% due to

transit ional vacancies associated with lease expiries. The 4-year building rehabil itation programme costing

approximately HK$400 mil l ion is due to be completed in the latter half of 2018.



OPERATIONAL REVIEW – INFRASTRUCTURE (continued)

Logistics (continued)China United International Rai l Containers Co., Limited (“CUIRC”) performed steadi ly during the Current

Pe r iod and saw a th roughput g rowth o f 4% to 1 ,367 ,000 TEUs . W i th U rumq i t e rm ina l i n ope ra t i on

s ince mid-2017, the expanded CUIRC network is wel l pos i t ioned to capi ta l ize on the development of

containerized rai l transportation under the Belt and Road Init iat ive.

Throughput handled by Xiamen Container Terminal Group Co., Ltd. grew by 1% to 4,357,000 TEUs while

government subsidy on t ranshipment serv ices fur ther enhanced i ts prof i t contr ibut ion. Throughput of

Tianj in Five Continents International Container Terminal Co., Ltd. and Tianj in Orient Container Terminals

Co., Ltd. rose by 1% to 1,338,000 TEUs and 10% to 544,000 TEUs respectively during the Current Period.

AviationThis segment includes the Group’s investments in BCIA and its commercial aircraft leasing business. AOP

surged by 67% in the Current Per iod which was mainly dr iven by the expansion of the aircraft f leet of

Goshawk Aviation Limited (“Goshawk”).

BCIA has been the world’s second busiest airport in terms of passenger throughput since 2010. During

the Current Period, BCIA’s passenger throughput remained relat ively stable at 49.2 mil l ion. The growth

in aeronautical revenue reflected the steady rise in international passengers within the traff ic mix and the

implementation of the new domestic tarif f. Non-aeronautical revenue also benefitted from the increase in

international passengers and addit ional rental space for lounge and other commercial operations in the

terminals. In January 2018, a strategic decision was made to partial ly dispose of the Group’s interest in

BCIA. Upon the completion of this divestment, the Group holds approximately 12.79% of the total issued

H shares of BCIA and a prof i t on disposal of approximately HK$0.8 bi l l ion has been recognized in the

second half of FY2018. Subsequently, an executive director of the Company resigned as a non-executive

d i rector and a member of the strategy committee of BCIA. As a resul t , the Group ceased to exerc ise

signif icant inf luence on BCIA and its interest in BCIA was reclassif ied from investment in an associated

company to an available-for-sale f inancial asset. Pursuant to HKAS 39 “Financial Instruments: Recognit ion

and Measu remen t ” , a ga i n on the r emeasu remen t a t f a i r va l ue upon rec l ass i f i ca t i on amoun t i ng to

approximately HK$1 bi l l ion has been recognized in the second half of FY2018.

Goshawk cont inued to pursue i ts expans ion st rategy by stay ing focused on commerc ia l a i rcra f t that

a re young , i n demand , f ue l e f f i c i en t and equ ipped w i th modern t echno logy and th rough cus tomer

d ivers i f icat ion. As at 31 December 2017, Goshawk’s f leet compr ised 99 a i rcra f t , hav ing grown f rom

84 aircraft since 30 June 2017. The aircraft portfol io had an average age of 3.2 years and was on lease

to 37 ai r l ines in 28 countr ies as at 31 December 2017. Together with the planned del ivery of another

13 aircraft, the overal l portfol io size of Goshawk has increased to 112 aircraft as at 31 December 2017.

There were successful issuances of secured and unsecured notes amounting to US$830 mil l ion through

two private placements in the United States during the Current Period. Addit ional ly, Goshawk’s abi l i ty to

tap into diverse funding sources globally bore testimony to its reputation, strength and competit iveness in

the market.

The second commercial a ircraft leasing platform, Bauhinia Aviat ion Capital Limited (“Bauhinia”), a jo int

v e n t u r e w i t h C h o w T a i F o o k E n t e r p r i s e s L i m i t e d ( “ C T F E n t e r p r i s e s ” ) a n d A v i a t i o n C a p i t a l G r o u p

LLC (“ACG”), owned and managed a f leet s ize of s ix a ircraft as at 31 December 2017. Subsequent to

ACG’s exit in January 2018, the Group increased its equity interest in Bauhinia from 40% to 50%.

The total assets value on book of the Group’s two commercial aircraft leasing platforms reached US$4.6

bi l l ion as at 31 December 2017.



OPERATIONAL REVIEW – SERVICESThe Services division recorded an AOP of HK$656.8 mil l ion in the Current Period, representing a decrease

of 34% from the Last Period. The Construction business maintained its growth momentum amid buoyant

property market condit ions but the impact could not mit igate the subdued performance of Free Duty and

the init ial operating losses incurred by GHK Hospital during its ramp-up phase.

AOP Contribution by SegmentFor the six months ended 31 December

2017 2016 Change %

HK$’m HK$’m Fav./(Unfav.)

Facilities Management (84.4) 258.9 (133)

Construction & Transport 606.6 533.6 14

Strategic Investments 134.6 202.2 (33)

Total 656.8 994.7 (34)

Facilities ManagementThe Faci l i t ies Management segment main ly compr ises the management and operat ion of HKCEC, the

business of Free Duty, the operation of GHK Hospital and other healthcare related investments.

As the winner of the “Outstanding Venue Award” at the 2017 AFECA Asian Awards ceremony organized

by the Asian Federat ion of Exhibit ion and Convention Associat ions, HKCEC f irmly cemented its leading

posit ion as one of the best convention and exhibit ion venues in the region. During the Current Period,

563 events were he ld at HKCEC with a tota l patronage of approx imate ly 5.0 mi l l ion. Whi le exh ib i t ion

business remained stable, banquet revenue grew healthi ly on the back of var ious celebrat ion functions

associated with the 20th Anniversary of the Establishment of the Hong Kong SAR. Looking ahead, Hong

Kong Convention and Exhibit ion Centre (Management) Limited, the management company for HKCEC, wil l

focus its business development efforts to host new knowledge based and professional development related

exhibit ions as well as sizeable conferences during non-exhibit ion seasons.

The Free Duty business swung into a loss in the Current Period as profit margins were further suppressed

since the commencement of a new concession contract in 2017 while tourist spending remained sluggish.

Strateg ies are in p lace to cont inue to boost sa les and save costs. Management expects Free Duty’s

downtrend wil l bottom out in the near future.

GHK Hospi ta l , in which the Group has 40% interest , commenced operat ions in la te March 2017 and

cont inued to incur operat ing losses dur ing i ts business ramp-up. Radiotherapy and Oncology Centre,

Dialysis Centre and 24-hour Outpatient and Emergency Services came into services during the Current

Period. Currently, over 120 al l- inclusive f ixed-price packages are being offered to patients.



OPERATIONAL REVIEW – SERVICES (continued)

Facilities Management (continued)To capture the growing demand for healthcare services in Mainland China, the Group and CTF Enterprises

set up Healthcare Assets Management Limited (“Healthcare Assets”) during FY2017 to invest in primary

healthcare faci l i t ies. New World Development Company Limited (“NWD”, the Company’s holding company)

subsequently subscribed for 40% of the enlarged issued share capital of Healthcare Assets in September

2017 . Hea l thca re Asse ts cu r ren t l y ope ra tes fou r c l i n i cs i n Be i j i ng and Shangha i . NWD’s s t reng ths

and exper t i se in rea l es ta tes , corporate re la t ionsh ip , cap i ta l investments and customer re la t ionsh ip

management wi l l enhance the development of Healthcare Assets in the healthcare market in Mainland

China and further faci l i tate the Group’s long-term expansion plan into healthcare business. The Group

also holds 20% interest in UMP Healthcare China Limited which offers corporate healthcare solutions and

health check-up services.

Construction & TransportAOP contr ibut ion from the Construct ion business increased notably by 16% to HK$475.6 mil l ion in the

Current Period mainly due to the continuous improvement in gross profit and satisfactory job progress.

Major projects during the Current Period included construction of Home Ownership Scheme Developments

at Kiu Cheong Road, Tin Shui Wai, New World Centre re-modell ing, a factory development at Yuen Long

Industrial Estate, property development projects at the MTR Tsuen Wan West Station and Tai Wai Station.

In addition, new tenders awarded during the Current Period included construction of Public Rental Housing

Development at Chung Nga Road East, Tai Po, foundat ion works for a res ident ia l development at Sin

Fat Road, Kwun Tong and advance works at a business development site at Wing Hong Street, Cheung

Sha Wan. As at 31 December 2017, the gross value of contracts on hand for the Construction business

was approximately HK$89.6 bi l l ion and the remaining works to be completed amounted to approximately

HK$45.4 bi l l ion.

Fol lowing the opening of MTR Kwun Tong Line Extension and South Island Line, r idership of the Group’s

franchised bus services fel l by approximately 6%. Impacted by the overal l decl ine in r idership and fare

revenue and the continuous rise in operating costs, the profit of NWS Transport Group from public bus

services fel l substantial ly by 56% from HK$246.5 mil l ion to HK$108.6 mil l ion in the Current Period despite

the drop in fue l costs under the hedging programme. However, the addi t ional contr ibut ion f rom NWS

Transport as a wholly owned subsidiary of the Group was able to offset such negative effects in the Current

Per iod. Hence, the AOP contr ibut ion f rom the Group’s Transport bus iness grew by 5% to HK$131.0

mi l l ion. In August 2017, New Wor ld F i rst Bus Serv ices L imited and Citybus L imited appl ied for a fare

increase of 12% in view of r ising operational costs.

Strategic InvestmentsThis segment includes investments which have strategic value to the Group or have growth potential, as

well as certain investments which the management bel ieves can enhance the value of the shareholders.

The AOP for the Current Per iod mainly comprised the share of prof i ts of Hyva Holding B.V. as wel l as

income from certain investments, and the div idend income from Haitong Internat ional Securit ies Group

Limited which is the Group’s avai lable-for-sale f inancial asset.



BUSINESS OUTLOOKDespite the somewhat mixed results, the Group’s f inancial and operating performances during the Current

Period were largely within expectations. The most noteworthy accomplishment being the commendable

growth throughout the whole Infrastructure division. The fact that the Roads segment took ful l advantage

of the r is ing economic act iv i t ies in Main land China whi le the Aviat ion segment capi ta l ized on the fast

growing global aviation industry clearly demonstrated the effectiveness of our market posit ioning strategy.

As ant ic ipa ted, the d ive rse bus iness env i ronments in Hong Kong produced mudd led resu l ts fo r the

Services div is ion. The Construct ion business maintained sol id growth momentum as the local demand

for property looks set to remain buoyant. However, this upbeat performance fel l short of ful ly mit igating

the downturn of the Faci l i t ies Management segment with Free Duty being affected by the sluggish tourist

spend ing and r i s ing cos t base and the new GHK Hosp i ta l mak ing losses a lbe i t expected dur ing i t s

ramp-up.

With a d ivers i f ied business port fo l io, the Group is exposed to volat i l i t ies and ever changing business

environments. The management team wil l remain committed to improving our profitabi l i ty while proactively

apprais ing and seiz ing investment and divestment opportunit ies to dr ive sustainable growth. Based on

the past performance of the tol l road business, the Group is confident that the acquisit ion of Suiyuenan

Expressway in January 2018 wil l be both accretive and synergistic. The management strategic decision to

partial ly dispose of the Group’s interest in BCIA also demonstrated our abi l i ty to unlock the value of this

long-term investment as and when appropriate.

Back on home ground, competit ive strategies are well in place to improve profit margins and tighten up

the cost base of the Services division. Despite the competit ion from the rai l network, the Group retains

an opt imist ic out look for NWS Transport Group in l ight of the stable oi l pr ices whi le the appl icat ion to

raise bus fare awaits government approval. The management of Free Duty has made steadfast progress in

developing new sales channels and implementing marketing init iat ives to arrest the current downtrend. In

view of the r ising demand for qual ity private healthcare services in Hong Kong and Mainland China, GHK

Hospital and Healthcare Assets are well posit ioned to capture the growth in this sector. The Group has

secured the tender to operate Phase II of HKCEC until 2028 and looks forward to leveraging our experience

and expertise to optimize the operational eff iciency of this world class faci l i ty.

The Group’s proven business model and strong under ly ing f inancia l strength wi l l cont inue to serve as

the foundat ion for our long-term growth and success. Hav ing incurred over HK$2.6 b i l l ion in cap i ta l

expendi tures in the current f inancia l year, the Group has further earmarked HK$2 bi l l ion for potent ia l

investments unti l the end of FY2018. The Group is well prepared to undertake investment opportunit ies to

fuel future growth and to embrace chal lenges ahead.

Independent Auditor’s Review Report


REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATIONTO THE BOARD OF DIRECTORS OF NWS HOLDINGS LIMITED( incorporated in Bermuda with l imited l iabi l i ty)

IntroductionWe have rev iewed the in ter im f inanc ia l in format ion set out on pages 13 to 49, wh ich compr ises the

condensed consol idated statement of f inancial posit ion of NWS Holdings Limited (the “Company”) and

its subsidiaries (together, the “Group”) as at 31 December 2017 and the related condensed consolidated

statements of income, comprehensive income, changes in equity and cash f lows for the six-month then

ended, and a summary of signif icant accounting policies and other explanatory notes. The Rules Governing

the Listing of Securit ies on The Stock Exchange of Hong Kong Limited require the preparation of a report

on interim f inancial information to be in compliance with the relevant provisions thereof and Hong Kong

Accounting Standard 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certif ied Public

Accountants. The directors of the Company are responsible for the preparation and presentation of this

inter im f inancial informat ion in accordance with Hong Kong Account ing Standard 34 “ Inter im Financial

Report ing”. Our responsibi l i ty is to express a conclusion on this inter im f inancial information based on

our review and to report our conclusion solely to you, as a body, in accordance with our agreed terms of

engagement and for no other purpose. We do not assume responsibi l i ty towards or accept l iabi l i ty to any

other person for the contents of this report.

Scope of ReviewWe conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 “Review

of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Hong

Kong Institute of Certi f ied Public Accountants. A review of interim f inancial information consists of making

inquiries, primari ly of persons responsible for f inancial and accounting matters, and applying analytical and

other review procedures. A review is substantial ly less in scope than an audit conducted in accordance

with Hong Kong Standards on Audit ing and consequently does not enable us to obtain assurance that we

would become aware of al l signif icant matters that might be identif ied in an audit. Accordingly, we do not

express an audit opinion.

ConclusionBased on our review, nothing has come to our attention that causes us to believe that the interim financial

information is not prepared, in al l material respects, in accordance with Hong Kong Accounting Standard

34 “Interim Financial Reporting”.

PricewaterhouseCoopersCertif ied Public Accountants



Interim Results

The Board is pleased to present the unaudited condensed consolidated interim f inancial statements (the

“ inter im f inancial statements”) of the Group for the Current Per iod. The inter im f inancial statements of

the Group include the condensed consol idated income statement, condensed consol idated statements

of comprehensive income, changes in equity and cash f lows for the Current Period and the condensed

consolidated statement of f inancial posit ion as at 31 December 2017, al l of which are unaudited, along

with other explanatory notes, and are set out on pages 13 to 49 of this report.

Condensed Consolidated Income Statement – Unaudited


Note

2017HK$’m

2016

HK$’m

Revenue 5 18,076.9 13,846.0

Cost of sales (16,134.5) (12,081.1)

Gross profit 1,942.4 1,764.9

Other income/gains 6 594.9 892.2

General and administrative expenses (720.7) (616.7)

Operating profit 7 1,816.6 2,040.4

Finance costs (165.4) (289.1)

Share of results of

Associated companies 5(b) 352.2 254.0

Joint ventures 5(b) 909.9 926.9

Prof it before income tax 2,913.3 2,932.2

Income tax expenses 8 (409.7) (323.1)

Prof it for the period 2,503.6 2,609.1

Attr ibutable to

Shareholders of the Company 2,478.1 2,600.1

Non-control l ing interests 25.5 9.0

2,503.6 2,609.1

Earnings per share attr ibutable to

the shareholders of the Company 9

Basic HK$0.64 HK$0.68

Diluted HK$0.64 N/A

Interim Results


Condensed Consolidated Statement of Comprehensive Income – Unaudited


2017HK$’m

2016

HK$’m

Prof it for the period 2,503.6 2,609.1

Other comprehensive income/(loss)

Item that wil l not be reclassif ied to profit or loss

Revaluation of property, plant and equipment upon

transfer to investment properties 26.4 –

Items that have been reclassif ied/may be subsequently

reclassif ied to profit or loss

Fair value changes on avai lable-for-sale f inancial assets 91.6 (21.6)

Release of reserve upon disposal of avai lable-for-sale

f inancial assets 2.7 (15.6)

Release of reserve upon restructuring of a joint venture – 5.7

Release of reserves upon remeasurement of previously

held equity interest in a joint venture – 35.6

Release of reserve upon deregistration of subsidiaries (61.1) (15.3)

Share of other comprehensive income/(loss)

of associated companies and joint ventures 12.1 (6.2)

Cash f low hedges 41.8 248.5

Currency translation differences 1,233.0 (1,576.4)

Other comprehensive income/(loss) for the period, net of tax 1,346.5 (1,345.3)

Total comprehensive income for the period 3,850.1 1,263.8

Total comprehensive income attr ibutable to

Shareholders of the Company 3,831.1 1,265.1

Non-control l ing interests 19.0 (1.3)

3,850.1 1,263.8

Interim Results


Condensed Consolidated Statement of Financial Position – Unaudited

(Unaudited) (Audited)

At31 December

2017

At

30 June

2017

Note HK$’m HK$’m

ASSETSNon-current assets

Investment properties 10 1,654.8 1,568.9

Property, plant and equipment 11 5,429.5 5,487.8

Intangible concession rights 12 12,004.1 11,936.2

Intangible assets 13 770.1 786.6

Associated companies 14 17,034.8 16,180.5

Joint ventures 15 15,155.6 15,128.8

Avai lable-for-sale f inancial assets 16 3,285.2 3,025.5

Other non-current assets 17 907.3 887.0

56,241.4 55,001.3

Current assets

Inventories 392.2 484.0

Trade and other receivables 18 16,194.6 13,787.2

Cash and bank balances 6,420.8 6,453.4

23,007.6 20,724.6

Total assets 79,249.0 75,725.9

Interim Results


(Unaudited) (Audited)

At31 December

2017

At

30 June

2017


EQUITYShare capital 19 3,894.5 3,888.3

Reserves 20 44,758.8 45,168.8

Shareholders’ funds 48,653.3 49,057.1

Non-control l ing interests 220.3 217.9

Total equity 48,873.6 49,275.0

LIABILITIESNon-current l iabi l i t ies

Borrowings 21 11,460.6 9,376.9

Deferred tax l iabi l i t ies 2,635.5 2,519.0

Other non-current l iabi l i t ies 227.2 226.2

14,323.3 12,122.1

Current l iabi l i t ies

Borrowings 21 1,109.2 305.8

Trade and other payables 22 14,488.3 13,642.9

Taxation 454.6 380.1

16,052.1 14,328.8

Total l iabi l i t ies 30,375.4 26,450.9

Total equity and l iabi l i t ies 79,249.0 75,725.9

Condensed Consolidated Statement of Financial Position – Unaudited (continued)

Interim Results


Condensed Consolidated Statement of Changes in Equity – Unaudited

For the six months ended 31 December 2017

Shareholders’ funds

Non-

HK$’m Note

Share capital

Share premium

Revenue reserve

Otherreserves Total

controlling interests Total

At 1 July 2017 3,888.3 17,521.8 27,002.4 644.6 49,057.1 217.9 49,275.0

Total comprehensive income for the period – – 2,480.7 1,350.4 3,831.1 19.0 3,850.1

Contributions by/(distr ibution to) owners

Dividend paid to

Shareholders of the Company 23 – – (4,322.9) – (4,322.9) – (4,322.9) Non-control l ing interests – – – – – (0.1) (0.1) Share options

Nominal value of new shares issued 6.2 – – – 6.2 – 6.2 Share premium on new shares issued – 81.8 – – 81.8 – 81.8 Repayment of capital to a non-

control l ing shareholder – – – – – (16.5) (16.5)

Total transactions with owners 6.2 81.8 (4,322.9) – (4,234.9) (16.6) (4,251.5)

At 31 December 2017 3,894.5 17,603.6 25,160.2 1,995.0 48,653.3 220.3 48,873.6

Interim Results


Condensed Consolidated Statement of Changes in Equity – Unaudited (continued)


Shareholders’ funds

Non-

HK$’m Note

Share

capital

Share

premium

Revenue

reserve

Other

reserves Total

control l ing

interests Total

At 1 July 2016 3,832.0 16,840.4 23,824.7 1,121.8 45,618.9 239.5 45,858.4

Total comprehensive income for the period – – 2,590.7 (1,325.6) 1,265.1 (1.3) 1,263.8

Contributions by/(distr ibutions to) owners

Dividend paid to

Shareholders of the Company 23 – – (1,302.9) – (1,302.9) – (1,302.9)

Non-control l ing interests – – – – – (5.7) (5.7)

Scrip dividend

Nominal value of new shares issued 24.9 – – – 24.9 – 24.9

Share premium on new shares issued – 291.1 – – 291.1 – 291.1

Share options

Value of services provided – – – 6.3 6.3 – 6.3

Total transactions with owners 24.9 291.1 (1,302.9) 6.3 (980.6) (5.7) (986.3)

At 31 December 2016 3,856.9 17,131.5 25,112.5 (197.5) 45,903.4 232.5 46,135.9

Interim Results


Condensed Consolidated Statement of Cash Flows – Unaudited


Note

2017HK$’m

2016

HK$’m

Cash f lows from operating activit ies

Net cash generated from operations 26(a) 1,654.0 1,007.3

Finance costs paid (134.7) (228.9)

Interest received 92.4 146.7

Hong Kong profits tax paid (216.6) (165.7)

Mainland China and overseas taxation paid (116.3) (247.8)

Net cash generated from operating activit ies 1,278.8 511.6

Cash f lows from investing activit ies

Dividends received from associated companies and

joint ventures 1,029.0 1,255.5

Increase in investments in and advances to associated

companies (233.4) (1,027.4)

Increase in investments in and advances to joint ventures (494.7) (1,112.7)

Addit ions of intangible concession rights, property, plant

and equipment (226.2) (45.8)

Addit ions of avai lable-for-sale f inancial assets (303.5) (34.5)

Disposal of property, plant and equipment 2.7 –

Disposal of avai lable-for-sale f inancial assets and a f inancial

asset at fair value through profit or loss 208.0 347.4

Acquisit ion of subsidiaries 26(b) – (930.1)

Disposal of subsidiaries 26(c) – 11.4

Disposal of assets held-for-sale – 3,373.1

Dividends received from avai lable-for-sale f inancial assets 35.2 14.8

Increase in other non-current assets – (1.5)

Decrease in short-term bank deposits maturing after more

than three months 2.5 26.9

Net cash from investing activit ies 19.6 1,877.1

Interim Results



2017HK$’m

2016

HK$’m

Cash f lows from financing activit ies

Issuance of new shares from share options exercised 88.0 –

New bank loans and other borrowings 3,286.5 3,026.0

Repayment of bank loans and other borrowings (425.1) (3,054.5)

Balance payment of acquisit ion of addit ional interests in a

subsidiary – (81.9)

Capital repayment to a non-control l ing shareholder (16.5) –

Dividends paid to shareholders of the Company (4,322.9) (986.9)

Dividends paid to non-control l ing interests (0.1) (5.7)

Decrease in loans from non-control l ing interests (8.5) (8.2)

Net cash used in f inancing activit ies (1,398.6) (1,111.2)

Net (decrease)/increase in cash and cash equivalents (100.2) 1,277.5

Cash and cash equivalents at the beginning of the period 6,436.8 8,892.9

Currency translation differences 70.1 (165.6)

Cash and cash equivalents at the end of the period 6,406.7 10,004.8

Analysis of cash and cash equivalents

Cash and bank balances 6,420.8 10,020.5

Short-term bank deposits maturing after more than three months (14.1) (15.7)

6,406.7 10,004.8

Condensed Consolidated Statement of Cash Flows – Unaudited (continued)

Interim Results


Notes to Condensed Consolidated Interim Financial Statements

1. General informationNWS Holdings L imited is a l imited l iabi l i ty company incorporated in Bermuda. The address of i ts

registered off ice is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

The principal activity of the Company is investment holding.

The principal activit ies of its subsidiaries include:

(a) the development, investment, operation and/or management of roads, environmental projects,

commercial aircraft leasing as well as ports and logistics faci l i t ies; and

(b) t h e i n v e s t m e n t i n a n d / o r o p e r a t i o n o f f a c i l i t i e s , c o n s t r u c t i o n , t r a n s p o r t a n d s t r a t e g i c

investments.

The Company has its l ist ing on the Main Board of The Stock Exchange of Hong Kong Limited (the

“Hong Kong Stock Exchange”).

The interim f inancial statements were approved for issuance by the Board on 26 February 2018.

2. Basis of preparation and accounting policiesThe inter im f inancia l s tatements have been prepared in accordance wi th Hong Kong Account ing

Standard 34 “ In ter im F inanc ia l Report ing” issued by the Hong Kong Inst i tu te o f Cer t i f ied Publ ic

Accountants (“HKICPA”) and Appendix 16 of the Rules Governing the List ing of Secur i t ies on the

Hong Kong Stock Exchange (the “List ing Rules”). The interim f inancial statements should be read in

conjunction with the annual f inancial statements for FY2017, which have been prepared in accordance

wi th Hong Kong F inancia l Report ing Standards, Hong Kong Account ing Standards (“HKAS”) and

interpretations (col lectively, the “HKFRS”).

The accounting policies used in the preparation of the interim financial statements are consistent with

those set out in the annual report for FY2017 except for the adoption of amendments to standards

and early adoption of HKFRS 15 “Revenue from Contracts with Customers” (“HKFRS 15”) which are

further explained as below.

(a) Adoption of amendments to standardsDuring the Current Period, the Group adopted the fol lowing amendments to standards which are

relevant to the Group’s operations and are mandatory for FY2018:

HKAS 7 (Amendments) Disclosure Init iat ive

HKAS 12 (Amendments) Recognit ion of Deferred Tax Assets for Unreal ized Losses

HKFRSs Amendments Annual Improvements to HKFRSs 2014-2016 Cycle

The adoption of the above amendments to standards has no material effect on the results and

f inancial posit ion of the Group.

Interim Results


2. Basis of preparation and accounting policies (continued)(b) Early adoption of HKFRS 15 “Revenue from Contracts with Customers”

HKFRS 15 as issued by HKICPA is effective for the f inancial year beginning or after 1 January

2018.

The Group has e lec ted to ear l y adopt HKFRS 15 fo r FY2018 because the new account ing

policies provide more rel iable and relevant information for users to assess the amounts, t iming

and uncertainty of revenue and cash f lows. The Group has also elected to apply the “cumulative

ca tch-up” t rans i t i on method whereby the e f f ec ts o f adopt ing HKFRS 15 fo r uncomp le ted

contracts with customers as at 30 June 2017 are adjusted at the opening balance of equity as

at 1 July 2017 and prior period comparatives are not restated. The effects of the adoption of

HKFRS 15 are set out in note 3 below.

HKFRS 15 establishes a comprehensive framework for determining when to recognize revenue

and how much revenue to recognize through a 5-step approach: ( i ) ident i fy the contract (s )

w i th customer; ( i i ) ident i fy separate per formance ob l igat ions in the contract ; ( i i i ) determine

the t ransact ion pr ice; ( iv ) a l locate the t ransact ion pr ice to the performance obl igat ions; and

(v) recognize revenue when a performance obl igat ion is sat isf ied. The core pr inciple is that a

company should recognize revenue when control of a good or service transfers to a customer.

From 1 July 2017 onwards, the Group has adopted the following accounting policies on revenue.

Revenue i s recogn ized when or as the cont ro l o f the good or serv ice i s t rans fe r red to the

customer. Depending on the terms of the contract and the laws that apply to the contract ,

control of the good or service may be transferred over t ime or at a point in t ime. Control of the

good or service is transferred over t ime if the Group’s performance:

• provides al l of the benefits received and consumed simultaneously by the customer;

• creates or enhances an asset that the customer controls as the Group performs; or

• does no t c rea te an asse t w i th an a l te rna t i ve use to the Group and the Group has an

enforceable r ight to payment for performance completed to date.

If control of the good or service transfers over t ime, revenue is recognized over the period of

the contract by reference to the progress towards complete sat isfact ion of that performance

obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control

of the good or service.

The progress towards complete satisfaction of the performance obl igation is measured based

on one of the fo l lowing methods that best depict the Group’s per formance in sat is fy ing the

performance obligation:

• direct measurements of the value transferred by the Group to the customer; or

• the Group’s efforts or inputs to the satisfaction of the performance obligation relative to the

total expected efforts or inputs.

Incremental costs incurred to obtain a contract, if recoverable, are capital ized as contract assets

and subsequently amortized when the related revenue is recognized.

Interim Results


2. Basis of preparation and accounting policies (continued)(c) Standards, amendments to standards and interpretations which are not yet effective

The fol lowing new standards, amendments to standards and interpretations are mandatory for

accounting period beginning on or after 1 July 2018 or later periods but which the Group has not

early adopted:

HKFRS 9 Financial Instruments

HKFRS 16 Leases

HKFRS 17 Insurance Contracts

HK (IFRIC) – Int 22 Foreign Currency Transactions and Advance Consideration

HK (IFRIC) – Int 23 Uncertainty over Income Tax Treatments

HKAS 40 (Amendments) Transfers of Investment Property

HKFRS 2 (Amendments) C l a s s i f i c a t i o n a n d M e a s u r e m e n t o f S h a r e - b a s e d

Payment Transactions

HKFRS 4 (Amendments) Applying HKFRS 9 Financial Instruments with HKFRS 4

Insurance Contracts

HKFRS 9 (Amendments) Prepayment Features with Negative Compensation

HKFRS 10 and HKAS 28

(Amendments)

Sale or Contribution of Assets between an Investor and

its Associate or Joint Venture

HKAS 28 (Amendments) Long-term Interests in Associates and Joint Ventures

HKFRSs Amendments Annual Improvements to HKFRSs 2014-2016 Cycle

The Group has already commenced an assessment of the l ikely impact of adopting the above

new standards, amendments to standards and interpretat ions. The prel iminary assessment of

HKFRS 16 is detai led below. The Group wil l continue to assess the impact in more detai ls.

H K F R S 1 6 “ L e a s e s ” ( “ H K F R S 1 6 ” ) a d d r e s s e s t h e d e f i n i t i o n o f a l e a s e , r e c o g n i t i o n a n d

measurement of leases and establ ishes pr inciples for report ing useful information to users of

f inanc ia l s tatements about the leas ing act iv i t ies of both lessees and lessors. A key change

arising from HKFRS 16 is that most operating leases wil l be accounted for on the statements of

f inancial position for lessees. The Group is a lessee of certain premises and properties which are

currently classif ied as operating leases. HKFRS 16 provides a new provision for the accounting

treatment of leases when the Group is the lessee, almost al l leases should be recognized in the

form of an asset (for the r ight-of-use) and a f inancial l iabi l i ty (for the payment obligation). Short-

term leases of less than 12 months and leases of low-value assets are exempt from the reporting

obligation. The new standard wil l therefore result in an increase in assets and f inancial l iabi l i t ies

in the statements of f inancial posit ion. As for the f inancial performance impact in the statements

of comprehensive income, straight- l ine depreciat ion expenses on the r ight-of-use assets and

the interest expenses on the f inancial l iabi l i t ies are recognized and no rental expenses wil l be

recognized. The combination of a straight-l ine depreciat ion of the r ight-of-use assets and the

effective interest rate method applied to the f inancial l iabi l i t ies wil l result in a higher total charge

to income statements in the init ial years of the lease, and decreasing expenses during the latter

part of the lease term.

The Group conducted prel iminary assessment and est imated that the adopt ion of HKFRS 16

would result in recognit ion of r ight-of-use assets and f inancial l iabi l i t ies primari ly ar ising from

leases of premises and properties in relation to the Group’s various businesses. The Group wil l

continue to assess the impact in more detai ls.

The Group has a l ready commenced an assessment o f the impact o f o ther new s tandards ,

amendments to standards and interpretations, certain of which may be relevant to the Group’s

operat ions and may give r ise to changes in account ing pol ic ies, changes in disclosures and

remeasurement of certain items in the consolidated f inancial statements.

Interim Results


3. Change in accounting policyAs explained in note 2(b) above, the Group has early adopted HKFRS 15 from 1 July 2017, which

resu l ted in changes in account ing po l ic ies used in the preparat ion of the conso l idated f inanc ia l

statements. In accordance with the transit ional provisions in HKFRS 15, comparative f igures have not

been restated.

The account ing pol ic ies have been changed to comply with HKFRS 15, which replaces HKAS 18

“Revenue” and HKAS 11 “Const ruc t ion Cont rac ts” ( “HKAS 11” ) and the re la ted in te rpre ta t ions

associated with the recognit ion, classif ication and measurement of revenue and costs.

The adoption of HKFRS 15 resulted in changes in terminology used. “Amounts due from/to customers

fo r cont rac t works” p rev ious ly used under HKAS 11 in re la t ion to const ruc t ion cont rac ts were

reclassif ied as “Contract assets/l iabil it ies” under HKFRS 15 as shown in notes 18 and 22 respectively.

The adoption of HKFRS 15 has no material impact on the condensed consolidated income statement

and the condensed consolidated statement of cash f lows.

4. Financial risk management and fair value estimation(a) Financial risk factors

The Group’s act iv i t ies expose i t to a var iety of f inancia l r isks: market r isk ( interest rate r isk,

foreign exchange risk and price r isk), credit r isk and l iquidity r isk.

The inter im f inancial statements do not include al l f inancial r isk management information and

disclosures required in the annual f inancial statements, and should be read in conjunction with

the Group’s FY2017 annual f inancial statements.

There has been no change in any r isk management pol icies since the last year end.

(b) Fair value estimationThe carrying amounts and fair value disclosures of the f inancial instruments of the Group are as

fol lows:

( i ) Listed investments are stated at market prices. The quoted market price used for f inancial

assets he ld by the Group is the b id pr ice a t the end o f the repor t ing per iod. Un l i s ted

investments are stated at fair values which are estimated using other prices observed in

recent transactions or valuation techniques when the market is not readily avai lable.

( i i ) The fa i r va lue o f l ong- te rm f i nanc ia l l i ab i l i t i es i s es t ima ted by d i scoun t ing the fu tu re

contractual cash f lows at the current market interest rate that is avai lable to the Group for

similar f inancial instruments.

( i i i ) The carry ing values of bank balances, receivables, payables and short-term borrowings

approximate their fair values due to the short-term maturit ies of these assets and l iabi l it ies.

Interim Results


4. Financial risk management and fair value estimation (continued)(b) Fair value estimation (continued)

( iv) The fol lowing tables present the Group’s f inancial instruments that are measured at fa ir

value at 31 December 2017 and 30 June 2017 respectively:

• Quoted prices (unadjusted) in active markets for identical assets or l iabi l i t ies (Level 1).

• Inputs other than quoted pr ices included within Level 1 that are observable for the

asset or l iabi l i ty, either directly (that is, as prices) or indirectly (that is, derived from

prices) (Level 2).

• Inputs for the asset or l iabi l i ty that are not based on observable market data (that is,

unobservable inputs) (Level 3).

At 31 December 2017:

HK$’m Level 1 Level 2 Level 3 Total

AssetsFinancial assets at fair value through profit or loss

Trading securit ies 0.1 – – 0.1Available-for-sale f inancial assets

Equity securit ies 1,292.2 694.3 169.1 2,155.6 Debt securit ies 236.9 892.7 – 1,129.6Derivative f inancial instruments – 53.9 165.6 219.5

1,529.2 1,640.9 334.7 3,504.8

LiabilitiesDerivative f inancial instruments – (20.7) (16.0) (36.7)

At 30 June 2017:

HK$’m Level 1 Level 2 Level 3 Total

AssetsFinancial assets at fair value through profit or loss

Trading securit ies 0.1 – – 0.1

Available-for-sale f inancial assets

Equity securit ies 1,358.0 545.9 13.1 1,917.0

Debt securit ies 239.8 868.7 – 1,108.5

Derivative f inancial instruments – – 58.8 58.8

1,597.9 1,414.6 71.9 3,084.4

LiabilitiesDerivative f inancial instruments – (70.9) (18.9) (89.8)

There were no transfers of f inancial assets between Level 1 and Level 2 fair value hierarchy

classif ications.

Interim Results


4. Financial risk management and fair value estimation (continued)(b) Fair value estimation (continued)

( iv) (continued)

The fol lowing table presents the changes in Level 3 f inancial instruments for the Current

Period:

Available-for-sale Derivative Derivative

financial financial financialHK$’m assets assets liabilities

At 1 July 2017 13.1 58.8 (18.9)Addit ion 156.0 – –Total gain recognized in the condensed

consolidated income statement – 106.8 2.9

At 31 December 2017 169.1 165.6 (16.0)

Interim Results


5. Revenue and segment informationThe Group’s revenue is analyzed as fol lows:


2017 2016

HK$’m HK$’m

Roads 1,328.3 1,224.5

Facil i t ies Management 3,577.4 3,495.4

Construction & Transport 13,171.2 9,126.1

18,076.9 13,846.0

Management has determined the operating segments based on the reports reviewed by the Executive

Committee of the Company that are used to make strategic decis ions. The Execut ive Committee

reviews the Group’s internal report ing in order to assess performance and al locate resources. The

Executive Committee considers the businesses of the Group from product and service perspectives,

which comprised ( i ) Roads; ( i i ) Environment; ( i i i ) Logist ics; ( iv ) Aviat ion; (v) Faci l i t ies Management;

(vi ) Construction & Transport; and (vi i ) Strategic Investments.

The Executive Committee assesses the performance of the operating segments based on a measure

of attr ibutable operating profit. This measurement basis excludes the effects of corporate off ice and

non-operat ing i tems. Corporate interest income, f inance costs and expenses are not a l located to

segments.

Interim Results


5. Revenue and segment information (continued)(a) The information of the reportable segments provided to the Executive Committee for the Current

Period is as fol lows:

Facilities Construction StrategicHK$’m Roads Environment Logistics Aviation Management & Transport Investments Total


Total revenue 1,328.3 – – – 3,578.7 13,171.2 – 18,078.2 Recognized at a point in t ime 1,328.3 – – – 2,850.1 1,660.3 – 5,838.7 Recognized over t ime – – – – 728.6 11,510.9 – 12,239.5Inter-segment – – – – (1.3) – – (1.3) 1,328.3

Revenue – external 1,328.3 – – – 3,577.4 13,171.2 (i) – 18,076.9

Attr ibutable operating profit

Company and subsidiaries 616.1 7.0 – – 102.2 542.6 42.2 1,310.1 Associated companies 36.7 216.3 73.8 154.2 (181.8) 64.0 81.5 (ii) 444.7 (b) Joint ventures 375.0 70.5 264.7 211.0 (4.8) – 10.9 927.3 (b)

1,027.8 293.8 338.5 365.2 (84.4) 606.6 (i) 134.6 2,682.1

Reconcil iat ion – corporate off ice and

non-operating items

Gain on fair value of investment

properties 55.0 Net gain on disposal of projects 38.8 Interest income 18.1 Finance costs (126.6) Expenses and others (189.3)

Profit attr ibutable to shareholders 2,478.1

( i ) The amounts include revenue of HK$1,750.1 mi l l ion and attr ibutable operat ing prof i t of

HK$131.0 mil l ion from the Group’s Transport business.

( i i ) The amount includes the Group’s share of attr ibutable operating profit of HK$71.2 mil l ion

from certain associated companies engaged in investment activit ies.

Interim Results



Period is as fol lows (continued):

Facilities Construction Strategic SegmentHK$’m Roads Environment Logistics Aviation Management & Transport Investments Total Corporate Consolidated


Depreciation 11.9 – – – 49.5 213.6 – 275.0 2.6 277.6Amortization of intangible

concession rights 427.4 – – – – – – 427.4 – 427.4Amortization of intangible assets – – – – 15.6 0.9 – 16.5 – 16.5Addit ions to non-current assets

other than f inancial instruments,

deferred tax assets and

post-employment benefit assets 19.6 – – – 34.5 170.6 – 224.7 1.5 226.2Interest income 26.4 6.5 – 0.1 19.6 2.9 26.5 82.0 18.5 100.5Finance costs 1.7 – – – 0.4 36.7 0.1 38.9 126.5 165.4Income tax expenses 224.9 48.4 – 4.4 27.3 104.2 0.2 409.4 0.3 409.7

As at 31 December 2017

Company and subsidiaries 14,092.9 435.0 – 3,369.5 5,468.0 17,071.6 3,733.1 44,170.1 2,888.5 47,058.6Associated companies 1,703.7 4,152.9 2,147.3 3,235.2 1,375.5 1,718.4 2,697.3 17,030.3 4.5 17,034.8Joint ventures 5,326.9 3,338.4 3,063.0 2,106.3 3.9 2.5 1,293.2 15,134.2 21.4 15,155.6

Total assets 21,123.5 7,926.3 5,210.3 8,711.0 6,847.4 18,792.5 (i) 7,723.6 76,334.6 2,914.4 79,249.0

Total l iabi l i t ies 2,762.6 66.7 0.2 6.4 1,117.0 14,082.8 (i) 16.4 18,052.1 12,323.3 30,375.4

( i ) The balances include total assets of HK$5,621.0 mil l ion and total l iabi l i t ies of HK$1,598.2

mil l ion of the Group’s Transport business.

Interim Results




Facil i t ies Construction Strategic

HK$’m Roads Environment Logistics Aviation Management & Transport Investments Total

For the six months ended

31 December 2016

Total revenue 1,224.5 – – – 3,496.8 9,126.1 – 13,847.4

Inter-segment – – – – (1.4) – – (1.4)

Revenue – external 1,224.5 – – – 3,495.4 9,126.1 – 13,846.0

Attr ibutable operating profit

Company and subsidiaries 463.6 7.0 – 1.2 304.6 296.9 65.6 1,138.9

Associated companies 36.8 18.2 62.2 153.3 (46.1) 111.6 134.5 (i i ) 470.5 (b)

Joint ventures 232.8 231.2 253.9 64.5 0.4 125.1 (i ) 2.1 910.0 (b)

733.2 256.4 316.1 219.0 258.9 533.6 202.2 2,519.4

Reconcil iation – corporate office and

non-operating items

Gain on restructuring of a joint venture 454.3 (i i i )

Gain on remeasurement of

previously held equity interest

in a joint venture 113.1 (iv)

Gain on fair value of

investment properties 71.8

Net gain on disposal of projects 68.1

Impairment loss related to

an associated company (204.0) (b)

Interest income 38.4

Finance costs (257.1)

Expenses and others (203.9)

Prof it attr ibutable to shareholders 2,600.1

( i ) The amount included the Group’s share of attr ibutable operating profit of HK$125.1 mil l ion

from its Transport business.

( i i ) The amount included the Group’s share of attr ibutable operating profit of HK$103.8 mil l ion

from certain associated companies engaged in investment activit ies.

( i i i ) The amount represented gain on restructuring of SUEZ NWS, a then 50% joint venture of

the Group (note 6). Upon completion of the restructuring, the Group’s 42% investment in

SUEZ NWS was accounted for as an associated company.

( iv) The amount represented ga in on remeasur ing the Group’s 50% equi ty in terest in NWS

Transport, a then 50% joint venture of the Group held before the business combinat ion

(note 6) . Af ter complet ing the acquis i t ion, NWS Transport and i ts subs id iar ies became

indirectly wholly owned subsidiaries of the Company.

Interim Results




Facil i t ies Construction Strategic Segment

HK$’m Roads Environment Logistics Aviation Management & Transport Investments Total Corporate Consolidated

For the six months ended

31 December 2016

Depreciation 9.2 – – – 47.5 34.9 – 91.6 2.3 93.9

Amortization of intangible

concession rights 404.8 – – – – – – 404.8 – 404.8

Amortization of intangible assets – – – – 15.6 – – 15.6 – 15.6

Addit ions to non-current assets

other than f inancial instruments,

deferred tax assets and

post-employment benefit assets 8.8 – – – 10.7 4,623.9 – 4,643.4 1.4 4,644.8

Interest income 29.1 6.4 – 0.3 20.3 1.1 18.6 75.8 38.8 114.6

Finance costs 6.9 – – – 0.3 24.8 – 32.0 257.1 289.1

Income tax expenses 178.6 13.7 – 2.6 61.0 64.5 – 320.4 2.7 323.1

As at 30 June 2017

Company and subsidiaries 13,339.4 371.0 7.1 2,664.8 5,281.5 16,246.6 3,483.0 41,393.4 3,023.2 44,416.6

Associated companies 441.4 3,951.2 1,982.2 2,998.3 1,490.9 1,695.0 3,615.7 16,174.7 5.8 16,180.5

Joint ventures 5,648.1 3,231.1 2,915.9 2,035.5 63.0 2.5 1,220.5 15,116.6 12.2 15,128.8

Total assets 19,428.9 7,553.3 4,905.2 7,698.6 6,835.4 17,944.1 (i ) 8,319.2 72,684.7 3,041.2 75,725.9

Total l iabi l i t ies 2,575.8 27.0 0.3 11.8 1,202.5 13,066.4 (i ) 2.6 16,886.4 9,564.5 26,450.9

( i ) T h e b a l a n c e s i n c l u d e d t o t a l a s s e t s o f H K $ 5 , 5 0 3 . 9 m i l l i o n a n d t o t a l l i a b i l i t i e s o f

HK$1,598.9 mil l ion from the Group’s Transport business.

Interim Results


5. Revenue and segment information (continued)(b) Reconcil iat ion of attr ibutable operating profit from associated companies and joint ventures to

the condensed consolidated income statement:

Associated companies Joint ventures



HK$’m 2017 2016 2017 2016

Attr ibutable operating profit 444.7 470.5 927.3 910.0

Corporate and non-operating

items

Impairment loss (note 14(d)) – (204.0) – –

Others (92.5) (12.5) (17.4) 16.9

Share of results of associated

companies and joint ventures 352.2 254.0 909.9 926.9

(c) Information by geographical areas:

Revenue

Non-current assets other than financial instruments,

deferred tax assets and post-employment benefit

assets

For the six months ended31 December At

31 December2017

At

30 June

2017

HK$’m 2017 2016

Hong Kong 16,407.1 12,352.7 7,688.3 7,706.1

Mainland China 1,381.5 1,271.9 12,122.6 12,047.8

Macau 288.3 221.4 47.6 25.6

18,076.9 13,846.0 19,858.5 19,779.5

The operations of the Group’s Infrastructure division in Mainland China are undertaken mainly

through associated companies and joint ventures, the results of which are accounted for by the

equity method of accounting.

Interim Results


5. Revenue and segment information (continued)(c) Information by geographical areas (continued):

The Group’s share of revenue of associated companies and joint ventures are as fol lows:

Associated companies Joint ventures



HK$’m 2017 2016 2017 2016

Hong Kong 1,393.2 1,049.7 425.7 1,386.8

Mainland China 1,267.9 1,018.0 5,105.0 3,858.0

Macau 291.5 23.2 – 133.3

Global and others 338.0 438.4 1,942.0 1,255.2

3,290.6 2,529.3 7,472.7 6,633.3

6. Other income/gains


2017 2016


Gain on fair value of derivative f inancial instruments 106.8 –

Gain on fair value of investment properties 10 55.0 71.8

Gain on restructuring of a joint venture 5(a) – 454.3

Gain on remeasurement of previously held

equity interest in a joint venture 5(a) – 113.1

Profit on disposal of avai lable-for-sale f inancial assets 46.8 30.1

Profit on disposal of assets held-for-sale – 77.8

Net exchange gain/( loss) 116.0 (51.9)

Interest income 100.5 114.6

Other income 86.6 39.4

Machinery hire income 48.0 28.2

Dividend income 35.2 14.8

594.9 892.2

Interim Results


7. Operating profitOperating profit of the Group is arr ived at after credit ing and charging the fol lowing:


2017 2016


CreditingGross rental income from investment properties 30.0 32.9

Less: outgoings (7.4) (7.2)

22.6 25.7

ChargingCost of inventories sold 1,191.8 1,207.5

Cost of services rendered 14,942.7 10,873.6

Depreciation 11 277.6 93.9

Amortization of intangible concession rights 12 427.4 404.8

Amortization of intangible assets 13 16.5 15.6

Operating lease rental expenses – properties 129.1 40.8

8. Income tax expensesHong Kong profits tax is provided at the rate of 16.5% (2016: 16.5%) on the estimated assessable

profits for the Current Period. Taxation on Mainland China and overseas profits has been calculated

on the estimated taxable profits for the Current Period at the rates of tax prevail ing in the countries in

which the Group operates. These rates range from 12% to 25% (2016: 12% to 25%).

The amount of income tax charged to the condensed consolidated income statement represents:


2017 2016

HK$’m HK$’m

Current income tax

Hong Kong profits tax 118.6 118.0

Mainland China and overseas taxation 264.7 231.1

Deferred income tax charge/(credit) 26.4 (26.0)

409.7 323.1

Share of taxation of associated companies and joint ventures of HK$65.6 mil l ion (2016: HK$100.1

mil l ion) and HK$237.5 mil l ion (2016: HK$212.5 mil l ion) respectively are included in the condensed

conso l idated income statement as share o f resu l ts o f assoc ia ted compan ies and jo in t ventures

respectively.

Interim Results


9. Earnings per shareT h e c a l c u l a t i o n o f b a s i c e a r n i n g s p e r s h a r e f o r t h e C u r r e n t P e r i o d i s b a s e d o n e a r n i n g s o f

HK$2,478.1mil l ion (2016: HK$2,600.1 mil l ion) and on the weighted average of 3,891,289,900 (2016:

3,832,239,369) ordinary shares outstanding during the Current Period.

The calculation of di luted earnings per share for the Current Period is as fol lows:

For the sixmonths ended

31 December2017

HK$’m

Prof it attr ibutable to shareholders of the Company and

for calculation of basic and di luted earnings per share 2,478.1

Number of shares

Weighted average number of shares for calculating basic earnings per share 3,891,289,900Effect of di lut ive potential ordinary shares

Share options 1,199,867

Weighted average number of shares for calculating di luted earnings per share 3,892,489,767

The share options of the Company had an anti-di lut ive effect on the basic earnings per share for the

Last Period and were ignored in the calculation of di luted earnings per share.

10. Investment properties

ResidentialCommercial Commercial propertiesproperties in properties in Mainland

HK$’m Note Hong Kong in Macau China Total

At 1 July 2017 1,555.0 – 13.9 1,568.9Fair value changes 6 55.0 – – 55.0Transfer from property, plant and

equipment 11 – 30.3 – 30.3Translation differences – – 0.6 0.6

At 31 December 2017 1,610.0 30.3 14.5 1,654.8

The investment proper t ies were reva lued on 31 December 2017 by independent , pro fess iona l l y

qual i f ied valuers, Savi l ls Valuat ion and Professional Serv ices Limited and Savi l ls (Macau) L imited.

Valuations for properties were based on market value assessment or the income approach.

Interim Results


11. Property, plant and equipment

Buses,vessels

Other and otherLand and plant and Construction motor

HK$’m Note properties equipment in progress vehicles Total

CostAt 1 July 2017 1,364.5 2,299.1 147.2 3,269.0 7,079.8Addit ions – 43.6 98.6 80.5 222.7Disposals – (34.6) – (1.9) (36.5)Revaluation upon transfer

to investment properties 26.4 – – – 26.4Transfer to investment

properties 10 (31.3) – – – (31.3)Transfers – 0.5 (134.0) 133.5 –Translation differences – 6.9 – 0.1 7.0

At 31 December 2017 1,359.6 2,315.5 111.8 3,481.2 7,268.1

Accumulated depreciation and impairmentAt 1 July 2017 52.3 1,367.0 – 172.7 1,592.0Depreciation 7 31.1 102.5 – 144.0 277.6Disposals – (32.7) – (1.0) (33.7)Transfer to investment

properties 10 (1.0) – – – (1.0)Translation differences – 3.7 – – 3.7

At 31 December 2017 82.4 1,440.5 – 315.7 1,838.6

Net book valueAt 31 December 2017 1,277.2 875.0 111.8 3,165.5 5,429.5

At 30 June 2017 1,312.2 932.1 147.2 3,096.3 5,487.8

Interim Results


12. Intangible concession rights

Note HK$’m

CostAt 1 July 2017 18,482.7Addit ions 3.5Translation differences 771.9

At 31 December 2017 19,258.1

Accumulated amortization and impairmentAt 1 July 2017 6,546.5Amortization 7 427.4Translation differences 280.1

At 31 December 2017 7,254.0

Net book valueAt 31 December 2017 12,004.1

At 30 June 2017 11,936.2

13. Intangible assets

Operatingright and

HK$’m Note Goodwill others Total

CostAt 1 July 2017 and 31 December 2017 424.0 636.4 1,060.4

Accumulated amortization and impairmentAt 1 July 2017 15.4 258.4 273.8Amortization 7 – 16.5 16.5

At 31 December 2017 15.4 274.9 290.3

Net book valueAt 31 December 2017 408.6 361.5 770.1

At 30 June 2017 408.6 378.0 786.6

Interim Results


14. Associated companies

At At

31 December 30 June

2017 2017


Group’s share of net assets

Listed shares – Hong Kong (a) 4,387.9 4,127.2

Listed shares – Overseas (a) 864.3 874.9

Unlisted shares (b) 7,935.1 8,702.2

13,187.3 13,704.3

Goodwil l 816.1 714.8

Amounts receivable 1,819.4 1,761.4

Deposit paid for the acquisit ion of an associated company (c) 1,212.0 –

(d) 17,034.8 16,180.5

(a) As at 31 December 2017, the carrying amount represents the Group’s investments in BCIA, Wai

Kee Holdings Limited and Tharisa plc. The share of market value of the Group’s l isted associated

companies amounts to HK$6,545.2 mil l ion (30 June 2017: HK$6,025.7 mil l ion).

(b) As at 31 December 2017, the carry ing amount mainly represents the Group’s investments in

various infrastructure, ports, healthcare, strategic investments and other projects. Among which

the Group has part ic ipat ing interests and holds for investment purpose in certain investment

companies amounted to HK$1,833.0 mil l ion (30 June 2017: HK$2,740.8 mil l ion), whose assets

mainly comprise avai lable-for-sale f inancial assets, loans and receivables. The Group’s share of

attr ibutable operating profit of these investment companies for the Current Period amounted to

HK$71.2 mil l ion (2016: HK$103.8 mil l ion) as detai led in note 5(a)( i i ) .

(c) The ba l ance r ep resen t s depos i t pa i d f o r t he i n ves tmen t i n 30% equ i t y i n t e r es t i n Hube i

S u i y u e n a n E x p r e s s w a y C o . , L i m i t e d . T h e t o t a l c o n s i d e r a t i o n f o r t h e t r a n s a c t i o n w a s

approximately RMB1.1 bi l l ion. The transaction was completed in January 2018.

(d) Management regularly reviews whether there are any indications of impairment of the Group’s

investments in associated companies based on value in use calculat ions. Management is of

the view that there is no impairment of the Group’s investments in associated companies as at

31 December 2017.

The Group shared an impairment loss of approximately HK$204.0 mil l ion for Newton Resources,

the then associated company, in the condensed consol idated income statement for the Last

Period.

Interim Results


15. Joint ventures

At At

31 December 30 June

2017 2017

HK$’m HK$’m

Co-operative joint ventures

Cost of investment less provision 1,497.6 1,579.5

Goodwil l 86.2 86.2

Share of undistr ibuted post-acquisit ion results 1,960.7 2,087.4

Amounts receivable 16.3 12.1

3,560.8 3,765.2

Equity joint ventures

Group’s share of net assets 4,740.3 4,533.1

Goodwil l 87.2 87.2

4,827.5 4,620.3

Companies l imited by shares

Group’s share of net assets 3,972.0 3,737.7

Goodwil l 163.5 163.5

Amounts receivable 2,835.5 3,034.8

Amounts payable (203.7) (192.7)

6,767.3 6,743.3

15,155.6 15,128.8

As at 31 December 2017, the carrying amount mainly represents the Group’s investments in various

infrastructure, ports, logistics, commercial aircraft leasing and other projects. Management is of the

view that there is no impairment of the Group’s investment in joint ventures as at 31 December 2017.

16. Available-for-sale financial assets

At At

31 December2017

30 June

2017

HK$’m HK$’m

Equity securit ies l isted in Hong Kong 1,292.2 1,358.0

Debt securit ies l isted in Hong Kong 236.9 239.8

Unlisted equity securit ies 863.4 559.0

Unlisted debt securit ies 892.7 868.7

3,285.2 3,025.5

Interim Results


17. Other non-current assets

At At

31 December2017

30 June

2017

HK$’m HK$’m

Security deposits 868.5 868.1

Derivative f inancial instruments 3.7 –

Others 35.1 18.9

907.3 887.0

18. Trade and other receivables

At At

31 December2017

30 June

2017


Trade receivables (a) 2,396.0 2,543.3

Retention money receivables 2,105.1 1,822.3

Contract assets 3 243.3 –

Amounts due from customers for contract works 3 – 134.7

Other receivables, deposits and prepayments 7,164.7 6,056.2

Derivative f inancial instruments 215.8 58.8

Amounts due from associated companies 20.0 88.1

Amounts due from joint ventures 4,049.7 3,083.8

16,194.6 13,787.2

(a) The ageing analysis of trade receivables based on invoice date is as fol lows:

At At

31 December2017

30 June

2017

HK$’m HK$’m

Under 3 months 2,239.7 2,398.1

4 to 6 months 15.6 107.7

Over 6 months 140.7 37.5

2,396.0 2,543.3

The Group has va r ious c red i t po l i c i es fo r d i f f e ren t bus iness opera t ions depend ing on the

requirements of the markets and businesses in which the subsidiaries operate. Retention money

rece ivab les in respect o f const ruct ion serv ices are set t led in accordance wi th the terms of

respective contracts.

Interim Results


19. Share capital

Ordinary shares

No. of shares HK$’m

AuthorizedAt 1 July 2017 and 31 December 2017 6,000,000,000 6,000.0

Issued and fully paidAt 1 July 2017 3,888,292,088 3,888.3Exercise of share options 6,239,687 6.2

At 31 December 2017 3,894,531,775 3,894.5

Share Option SchemeThe share opt ion scheme of the Company ( the “Share Opt ion Scheme”) , wh ich was adopted on

21 November 2011, is val id and effective for a period of ten years from the date of adoption. The

Board may, at their discretion, grant options to any el igible participant as defined under the Share

Option Scheme to subscribe for the shares of the Company. The total number of shares which may

be issued upon exercise of al l opt ions to be granted under the Share Option Scheme must not in

aggregate exceed 10% of the share capital of the Company in issue as at 21 November 2011, i.e.

3,388,900,598 shares.

Movements in the number of share options during the Current Period are as fol lows:

Number ofoptions

At 1 July 2017 49,455,830Exercised (6,239,687)

At 31 December 2017 43,216,143

(a) On 9 March 2015, 55,470,000 share opt ions were granted to d i rectors and cer ta in e l ig ib le

participants at the exercise price of HK$14.160 per share, which represents the average closing

price of the Company’s shares in the dai ly quotations sheets of the Hong Kong Stock Exchange

for the f ive consecutive trading days immediately proceeding 9 March 2015. Such share options

wil l expire on 8 March 2020.

(b) Pursuant to the Share Option Scheme, the number of unexercised share options and the exercise

price may be subject to adjustment in case of alteration in the capital structure of the Company.

Due to the distr ibution of dividends of the Company in scrip form, several adjustments had been

made to the number and the exercise price of outstanding share options in accordance with the

Share Option Scheme in prior years. With effect from 15 May 2017, the exercise price per share

of the share options granted was adjusted to HK$14.120.

(c) The share options were vested according to the Share Option Scheme and the terms of grant

provided that for the vesting to occur the grantee has to remain as an eligible participant on such

vesting date.

Interim Results


20. Reserves

InvestmentShare Special revaluation Exchange Revenue

HK$’m premium reserves reserve reserve reserve Total

At 1 July 2017 17,521.8 692.4 207.6 (255.4) 27,002.4 45,168.8Profit for the period – – – – 2,478.1 2,478.1Dividend paid to shareholders of the Company – – – – (4,322.9) (4,322.9)Release of reserve upon deregistration of

subsidiaries – – – (45.6) – (45.6)Release of reserve upon disposal of

avai lable-for-sale f inancial assets – – 2.7 – – 2.7Fair value changes on avai lable-for-sale

f inancial assets

Group – – 89.8 – – 89.8 Joint ventures – – 1.8 – – 1.8Currency translation differences

Group – – – 516.7 – 516.7 Associated companies – – – 299.3 – 299.3 Joint ventures – – – 408.0 – 408.0Share options

Share premium on new shares issued 81.8 – – – – 81.8Share of other comprehensive income of

associated companies and joint ventures – 9.5 – – 2.6 12.1Revaluation of property, plant and equipment

upon transfer to investment properties – 26.4 – – – 26.4Cash f low hedges

Group – 2.5 – – – 2.5 Joint ventures – 39.3 – – – 39.3

At 31 December 2017 17,603.6 770.1 301.9 923.0 25,160.2 44,758.8

Special reserves include statutory reserves which are created in accordance with the relevant laws of

the People’s Republic of China and/or terms of the joint venture agreements of subsidiaries and joint

ventures establ ished in Mainland China and are required to be retained in the f inancial statements

of these subsidiaries and joint ventures for specif ic purposes. Special reserves also include capital

redemption reserve, share option reserve, property revaluation reserve and cash f low hedges reserve

arising from foreign exchange forward, interest rate and fuel price swaps.

Interim Results


21. Borrowings

At At

31 December 30 June

2017 2017


Non-current

Long-term bank loans

Unsecured 11,460.2 9,376.9

Other borrowings

Unsecured 0.4 –

11,460.6 9,376.9

Current

Current portion of long-term bank loans

Secured (a) 71.9 69.0

Unsecured 437.2 236.8

Short-term bank loans and overdrafts

Unsecured 600.0 –

Other borrowings

Unsecured 0.1 –

1,109.2 305.8

12,569.8 9,682.7

(a) Bank loans are secured by the intangible concession rights of Hangzhou Ring Road.

Interim Results


22. Trade and other payables

At At

31 December 30 June

2017 2017


Trade payables (a) 703.5 888.8

Retention money payables 1,617.4 1,453.6

Advances received from customers for contract works 1,669.9 1,669.9

Contract l iabi l i t ies 3 2,616.6 –

Amounts due to customers for contract works 3 – 2,202.6

Amounts due to non-control l ing interests 173.8 171.4

Other payables and accruals 7,672.4 7,204.0

Derivative f inancial instruments – 33.8

Amounts due to associated companies 34.2 18.8

Amounts due to joint ventures 0.5 –

14,488.3 13,642.9

(a) The ageing analysis of trade payables based on invoice date is as fol lows:

At31 December

2017

At

30 June

2017

HK$’m HK$’m

Under 3 months 635.0 829.0

4 to 6 months 5.6 25.7

Over 6 months 62.9 34.1

703.5 888.8

23. DividendA f ina l d iv idend of HK$1,518.9 mi l l ion (2016: HK$1,302.9 mi l l ion) and a specia l f ina l d iv idend of

HK$2,804.0 mil l ion (2016: Nil ) that related to FY2017 were paid in December 2017.

On 26 February 2018, the Board has resolved to declare an interim dividend of HK$0.32 per share

(2016 : pa id o f HK$0.34 pe r sha re ) fo r FY2018, wh ich i s payab le on o r about 27 Apr i l 2018 to

shareholders whose names appear on the register of members of the Company on 23 March 2018.

This inter im div idend, amount ing to HK$1,246.3 mi l l ion (2016: HK$1,311.5 mi l l ion), has not been

recognized as l iabil ity in this interim financial information. It wil l be recognized in shareholders’ equity

in FY2018.

Interim Results


24. Commitments(a) The outstanding commitments for capital expenditure are as fol lows:

At At

31 December 30 June

2017 2017


Contracted but not provided for

Property, plant and equipment 576.1 295.2

Capital contributions to/acquisit ions of

associated companies and joint ventures (i ) 1,957.0 1,656.6

2,533.1 1,951.8

( i ) The Group has committed to acquire or to provide suff icient funds in the form of advances,

cap i ta l and loan cont r ibu t ions to ce r ta in assoc ia ted compan ies and jo in t ven tu res to

f inance relevant projects. The directors estimate that the Group’s share of projected funds

requirements of these projects would be approximately HK$1,957.0 mil l ion (30 June 2017:

HK$1,656.6 mil l ion) which represents the attr ibutable portion of acquisit ion costs, capital

and loan contributions to be made to the associated companies and joint ventures.

(b) The Group’s share of commitments for capital expenditure committed by the joint ventures not

included above are as fol lows:

At31 December

2017

At

30 June

2017

HK$’m HK$’m

Contracted but not provided for

Property, plant and equipment 862.8 3,737.2

25. Financial guarantee contractsThe Group’s f inancial guarantee contracts are as fol lows:

At31 December

2017

At

30 June

2017

HK$’m HK$’m

Guarantees for credit faci l i t ies granted to

Associated companies 1,938.2 1,938.2

Joint ventures 2,136.8 1,651.1

4,075.0 3,589.3

Interim Results


26. Notes to condensed consolidated statement of cash flows(a) Reconcil iat ion of operating profit to net cash generated from operations:

For the six months ended 31 December

2017 2016

HK$’m HK$’m

Operating profit 1,816.6 2,040.4

Depreciation and amortization 721.5 514.3

Share-based payments – 5.8

Interest income (100.5) (114.6)

Gain on restructuring of a joint venture – (454.3)

Gain on remeasurement of previously held equity

interest in a joint venture – (113.1)

Gain on fair value of derivative f inancial instruments (106.8) –

Gain on fair value of investment properties (55.0) (71.8)

Profit on disposal of avai lable-for-sale f inancial assets (46.8) (30.1)

Profit on disposal of assets held-for-sale – (77.8)

Dividend income from avai lable-for-sale f inancial assets (35.2) (14.8)

Net exchange (gain)/ loss (61.8) 33.6

Other non-cash items 8.7 (3.1)

Operating profit before working capital changes 2,140.7 1,714.5

Increase in security deposits – (848.3)

Decrease/( increase) in inventories 91.8 (35.3)

Increase in trade and other receivables (1,415.4) (134.2)

Increase in trade and other payables 793.5 328.4

Decrease/( increase) in balances with associated

companies and joint ventures 3.9 (17.3)

(Decrease)/increase in amounts due to

non-control l ing interests (1.8) 0.9

Increase in deferred income 38.3 –

Others 3.0 (1.4)

Net cash generated from operations 1,654.0 1,007.3

Interim Results


26. Notes to condensed consolidated statement of cash flows (continued)(b) Acquisition of subsidiaries


2017 2016

HK$’m HK$’m

Consideration sett led in cash – (1,380.0)Cash and cash equivalents in subsidiaries acquired – 449.9

Cash outf low on acquisit ion – (930.1)

(c) Disposal of subsidiaries


2017 2016

HK$’m HK$’m

Net assets disposed Investment properties – 11.3 Trade and other receivables – 0.1

– 11.4

Represented by Cash consideration received – 11.4

27. Related party transactions(a) Except for those disclosed, the fol lowing is a summary of signif icant related party transactions

during the Current Period carried out in the normal course of the Group’s business:


2017 2016


Transactions with affiliated companies ( i )Provision of construction work services (i i ) – 318.8Provision of other services (i i i ) 1.7 2.9Interest income (iv) 42.4 58.3Management fee income (v) 4.3 11.6Rental and other related expenses (vi) (3.4) (5.0)Other expenses (vi i i ) (235.4) (169.1)

Transactions with other related parties ( i )Provision of construction work services (i i ) 5,191.3 4,516.6Provision of other services (i i i ) 29.0 18.6Rental and other related expenses (vi) (27.2) (27.5)Mechanical and electrical engineering services (vi i ) (261.0) (579.4)Other expenses (vi i i ) (74.1) (73.1)

Interim Results


27. Related party transactions (continued)(a) (continued)

( i ) A f f i l i a ted compan ies i nc lude assoc ia ted compan ies and jo in t ven tu res o f the Group .

Related parties are subsidiaries, associated companies and joint ventures of NWD and CTF

Enterpr ises as wel l as Mr Doo Wai Hoi, Wi l l iam (“Mr Doo”) and his associates which are

not companies within the Group. NWD is the ult imate holding company of the Company

and CTF Enterprises is a substantial shareholder of NWD. Mr Doo is the Vice-chairman and

a non-executive director of NWD and is the father of Mr Wil l iam Junior Guilherme Doo, a

non-executive director of the Company.

( i i ) Revenue from the provision of construction work services was charged in accordance with

the relevant contracts.

( i i i ) The Group provided var ious k inds of serv ices including faci l i t ies management, property

management and other serv ices to certa in af f i l iated companies and related part ies. The

services were provided and charged in accordance with the relevant contracts.

( iv) Interest income was charged at re levant interest rates on the outstanding balances due

from the aff i l iated companies.

(v) Management fee was charged at rates in accordance with the relevant contracts.

(vi) Rental and other related expenses were charged at rates in accordance with the respective

tenancy agreements.

(vi i ) Mechan ica l and e lec t r i ca l eng ineer ing se rv ices were charged in accordance w i th the

relevant contracts.

(vi i i ) Other expenses include purchase of construction materials, laundry, security and guarding,

l andscap ing , c l ean ing , p rope r t y management and o the r se r v i ces . The se rv i ces we re

charged in accordance with the relevant contracts.

(b) Key management compensationThe aggregate amounts of emoluments of the directors of the Company are as fol lows:


2017 2016

HK$’m HK$’m

Remuneration 34.9 27.4

Deemed share option benefits – 3.6

34.9 31.0

Interim Results


27. Related party transactions (continued)(c) On 29 September 2017, CTF Enterpr ises, Healthcare Ventures Holdings Limited (“Healthcare

V e n t u r e s ” , a d i r e c t w h o l l y o w n e d s u b s i d i a r y o f C T F E n t e r p r i s e s ) , N e w W o r l d S t r a t e g i c

Investment Limited (“New World Strategic”, a direct whol ly owned subsidiary of NWD), Smart

Future Investments Limited (“Smart Future”, an indirect wholly owned subsidiary of New World

Strategic), NWS Service Management Limited (“NWS Service”, a direct wholly owned subsidiary

of the Company) , Dynamic Al ly L imited (“Dynamic Al ly” , an indi rect whol ly owned subsid iary

of NWS Serv ice) and Healthcare Assets entered into an amended and restated jo int venture

agreement to regulate the respective rights and obligations of Healthcare Ventures, Smart Future

and Dynamic Al ly towards the management of Healthcare Assets, fol lowing the subscription of

shares in Healthcare Assets by Smart Future. Upon completion of the subscription, the entire

issued share capita l of Healthcare Assets is owned as to 30%, 40% and 30% by Healthcare

Ventures, Smart Future and Dynamic Al ly respect ive ly. The Group ceased i ts jo int contro l in

Healthcare Assets. Accordingly, the investment in Healthcare Assets was thereafter accounted

for as an associated company. Pursuant to the amended and restated joint venture agreement,

Healthcare Ventures, Smart Future and Dynamic Ally intend to invest an aggregate amount of up

to HK$780 mil l ion in Healthcare Assets.

(d) The total amounts receivable f rom associated companies and jo int ventures are HK$8,740.9

mil l ion (30 June 2017: HK$7,980.2 mil l ion). These balances are unsecured, of which HK$2,000.7

mi l l ion (30 June 2017: HK$1,996.5 mi l l ion) are interest bear ing. These balances also include

an aggregate amount of HK$197.5 mi l l ion (30 June 2017: HK$197.5 mi l l ion) which has been

subordinated to certain indebtedness of a joint venture. The total amounts payable to associated

companies, jo int ventures and non-control l ing interests are HK$451.9 mi l l ion (30 June 2017:

HK$429.3 mil l ion). These balances are unsecured and interest free.

28. Events subsequent to period endOn 11 January 2018, Fortland Ventures Limited (an indirect wholly owned subsidiary of the Company)

entered into a p lac ing agreement for the plac ing of 208,000,000 issued H shares of BCIA at the

placing pr ice of HK$11.35 per H share of BCIA ( the “Placing”) . Closing of the Placing took place

on 16 January 2018 and thereafter, the Group’s interest in BCIA’s total issued H shares reduced

f rom approx imate ly 23.86% to approx imate ly 12.79%. A prof i t on d isposa l under the P lac ing of

approximately HK$0.8 bi l l ion has been recognized in the second half of FY2018.

Subsequent ly , an execut ive d i rector of the Company res igned as a non-execut ive d i rector and a

member of the strategy committee of BCIA on 2 February 2018. As a result, the Group ceased to

exercise signif icant inf luence on BCIA and its interest in BCIA was reclassif ied from investment in an

associated company to an avai lable-for-sale f inancial asset with effect from 2 February 2018 with

its carrying value marked to its market value on 2 February 2018. Pursuant to HKAS 39 “Financial

I ns t ruments : Recogn i t i on and Measurement ” , a ga in on the remeasurement a t f a i r va lue upon

reclassif ication amounting to approximately HK$1 bi l l ion has been recognized in the second half of

FY2018.

29. Comparative figuresCertain comparative f igures have been reclassif ied to conform with the current period’s presentation.


Interim Dividend

The Board has resolved to declare an interim dividend for FY2018 (the “Interim Dividend”) of HK$0.32 per

share ( in cash) to the shareholders whose names appear on the register of members of the Company on

23 March 2018. It is expected that the Interim Dividend wil l be paid on or about 27 Apri l 2018.

CLOSURE OF REGISTER OF MEMBERSFor the purpose of determining shareholders’ entit lement to the Interim Dividend, the register of members

of the Company wil l be closed. Detai ls of such closure are set out below:

Latest t ime to lodge transfer documents for registration 4:30 pm on 22 March 2018

Closure of register of members 23 March 2018

Record date 23 March 2018

Interim Dividend payment date on or about 27 Apri l 2018

On the abovementioned closure date, no transfer of shares wil l be registered. In order to qual i fy for the

Inter im Div idend, al l proper ly completed transfer forms accompanied by the relevant share cert i f icates

must be lodged for registrat ion with the Company’s branch share registrar, Tr icor Standard Limited, at

Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong no later than the aforementioned latest

t ime.


Disclosure Pursuant to Rule 13.22 of the Listing Rules

As at 31 December 2017, the Group has provided f inancia l assistance, by way of shareholders’ loans

or advances, in the aggregate amount o f HK$8,740.9 mi l l ion to i ts a f f i l i a ted companies, guaranteed

bank l oans and o the r c r ed i t f ac i l i t i e s f o r t he bene f i t o f t he a f f i l i a t ed compan i es i n t he amoun t o f

HK$4,075.0 mil l ion and contracted to provide an aggregate amount of HK$1,821.0 mil l ion in capital and/

or loans to affi l iated companies. The said amounts, in aggregate, represent approximately 18.8% under the

assets ratio as defined under Rule 14.07(1) of the List ing Rules. Aff i l iated companies include associated

companies and joint ventures of the Group.

The advances are unsecured, interest free and have no definite repayment terms except for ( i) an aggregate

amount of HK$104.7 mi l l ion which carr ies interest at 8% per annum; ( i i ) an amount of HK$16.3 mi l l ion

which carries interest at Hong Kong prime rate; ( i i i ) an amount of HK$1,600.0 mil l ion which carries interest

at 6-month Hong Kong Interbank Offered Rate plus a margin of 1.3% per annum and is not repayable within

the next 12 months from the end of the reporting period; ( iv) an amount of HK$279.7 mil l ion which carries

interest at 12-month London Interbank Offered Rate plus a margin of 12.15% per annum and is repayable

on demand; (v) an aggregate amount of HK$3,368.4 mil l ion which is interest free and is repayable within

the next 12 months from the end of the report ing period; and (v i ) an amount of HK$81.4 mi l l ion which

is interest free and is not repayable within the next 12 months from the end of the reporting period. The

advances also include an aggregate amount of HK$197.5 mil l ion which has been subordinated to certain

indebtedness of an aff i l iated company. Contracted capital and loan contributions to aff i l iated companies

would be funded by internal ly generated resources and banking faci l i t ies of the Group.

Pursuant to Rule 13.22 of the Listing Rules, a proforma combined statement of f inancial posit ion of those

aff i l iated companies with f inancial assistance from the Group and the Group’s attributable interest in those

aff i l iated companies as at 31 December 2017 are presented as fol lows:

Proformacombined

statement offinancialposition

Group’sattributable

interestHK$’m HK$’m

Non-current assets 71,045.8 35,157.5

Current assets 8,296.1 3,104.8

Current liabilities (16,703.3) (10,289.6)

Non-current liabilities (40,260.7) (18,109.5)

22,377.9 9,863.2

T he p ro fo rma comb ined s ta temen t o f f i nanc ia l pos i t i on o f t he a f f i l i a t ed compan ies i s p repa red by

combining their statements of f inancial posit ion, after making adjustments to conform with the Group’s

signif icant accounting policies and re-grouping into signif icant classif ication in the statement of f inancial

posit ion, as at 31 December 2017.


Additional Information

CORPORATE GOVERNANCE PRACTICESThe Board f i rmly bel ieves that good corporate governance is fundamental to the smooth, effect ive and

transparent operation of a company and its abil i ty to attract investment, protect the rights of shareholders

and stakeholders, and enhance shareholder value. Maintaining a high standard of corporate governance

has been and remains one of the core missions of the Company. The Board devotes considerable effort to

identify and formalize best practices for adoption by the Company.

Throughout the Current Period, the Company has complied with al l the applicable code provisions under

the Corporate Governance Code as contained in Appendix 14 of the Listing Rules, with the exception of

code provision E.1.2.

Code provision E.1.2 provides that the chairman of the board should attend the annual general meeting.

Dr Cheng Kar Shun, Henry, the Chairman of the Board, was unable to attend the annual general meeting

of the Company held on 17 November 2017 (the “AGM”) due to his other engagement. Mr Tsang Yam Pui,

the Chief Executive Officer and Executive Director of the Company who took the chair of the AGM, together

with other members of the Board who attended the AGM, were of sufficient calibre for answering questions

at the AGM and had answered questions at the AGM competently.

DEALINGS IN THE COMPANY’S SECURITIES BY DIRECTORS AND RELEVANT EMPLOYEESThe Company has adopted the Model Code for Securit ies Transactions by Directors of Listed Issuers as

set out in Appendix 10 of the Listing Rules (the “Model Code”) as its own code of conduct for securit ies

t ransact ions by d i rec to rs . Spec i f i c enqu i r y was made w i th a l l d i rec to rs o f the Company and i t was

established that they had al l complied with the required standard of the Model Code during the Current

Period.

The Company has also adopted the “Code for Securit ies Transactions by Relevant Employees”, which is

no less exacting than the Model Code, for governing the securit ies transactions of specif ied employees

(“Relevant Employees”) who, because of thei r posi t ions, are l ike ly to come across unpubl ished ins ide

information. Fol lowing specif ic enquiry by the Company, al l Relevant Employees had confirmed that they

complied with the standard set out in the “Code for Securit ies Transactions by Relevant Employees” during

the Current Period.

UPDATE ON DIRECTORS’ INFORMATIONChanges in the information of directors of the Company since the disclosure made in the 2017 annual

report of the Company and up to the date of this report, that are required to be disclosed pursuant to

Rule 13.51B(1) of the List ing Rules, are set out below:

1. The term of service of Mr Tsang Yam Pui for acting as the Chief Executive Off icer and an executive

director of the Company has been extended for a further term of six months up to 31 December 2018.

2. Mr Cheung Chin Cheung was appointed as a member of the Hebei Province Committee of the Twelfth

Chinese People’s Political Consultative Conference of the People’s Republic of China on 28 January 2018.

3. Mr Cheng Chi Ming, Brian resigned as a non-executive director of Beij ing Capital International Airport

Company Limited, a l isted publ ic company in Hong Kong, on 2 February 2018. He was appointed

as a member o f the Th i r teenth Shangha i Munic ipa l Commit tee o f the Ch inese People ’s Po l i t ica l

Consultat ive Conference of the People’s Republic of China in January 2018, and he resigned as a

member of the Eleventh Hangzhou Municipal Committee of the Chinese People’s Polit ical Consultative

Conference of the People’s Republic of China in February 2018.



UPDATE ON DIRECTORS’ INFORMATION (continued)4. Mr Dominic Lai was appointed as a non-executive director of Chuang’s China Investments Limited, a

l isted public company in Hong Kong, on 1 December 2017. He resigned as a non-executive director

of Midas International Holdings Limited, a l isted public company in Hong Kong, on 26 January 2018.

5. Mr Will iam Junior Guilherme Doo was appointed as an independent non-executive director of The Bank

of East Asia (China) Limited, a subsidiary of The Bank of East Asia, Limited, on 30 September 2017. He

was also appointed as a member of the Standing Committee of the Thirteenth Chinese People’s Political

Consultative Conference in Beij ing of the People’s Republic of China on 17 January 2018.

6. Mr Shek Lai Him, Abraham was appointed as an independent non-executive director of Everbright

Grand China Assets Limited, a l isted public company in Hong Kong, on 16 January 2018. He resigned

as an independent non-execut ive director of Midas Internat ional Holdings Limited, a l isted publ ic

company in Hong Kong, on 26 January 2018.

AUDIT COMMITTEE AND REVIEW OF INTERIM RESULTSThe Audit Committee of the Company was set up by the Board with speci f ic terms for the purpose of

reviewing and providing supervision over the Group’s f inancial report ing process, and r isk management

and internal control. It currently comprises four independent non-executive directors and a non-executive

d i rector of the Company. The Audi t Committee has rev iewed the account ing pr inc ip les and pract ices

adopted by the Group and the unaudi ted condensed consol idated inter im f inancia l statements of the

Group for the Current Period with the management and the external auditor. The Audit Committee has also

reviewed this interim report.

The unaudited consolidated interim results of the Group for the Current Period have been reviewed by the

Company’s external auditor, PricewaterhouseCoopers, in accordance with Hong Kong Standard on Review

Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the

Entity” issued by the HKICPA.



DIRECTORS’ INTERESTS IN SECURITIESAs at 31 December 2017, the directors of the Company had the fol lowing interests in shares, underlying

shares and debentures of the Company and its associated corporations (within the meaning of Part XV of

the Securit ies and Futures Ordinance (the “SFO”)), as recorded in the register maintained by the Company

pursuant to Section 352 of the SFO:

(a) Long position in shares

Number of shares

Approximatepercentage ofshareholding

as at31.12.2017

Personalinterests

Familyinterests

Corporateinterests Total

The Company(Ordinary shares of HK$1.00 each)

Dr Cheng Kar Shun, Henry 18,349,571 – 12,000,000(1)

30,349,571 0.779%

Mr Tsang Yam Pui 180,000 – – 180,000 0.005%

Mr Lam Wai Hon, Patrick 1,816,207 – 7,608(2)

1,823,815 0.047%

Mr William Junior Guilherme Doo – – 128,869(3)

128,869 0.003%

Mr Kwong Che Keung, Gordon 1,207,077 – – 1,207,077 0.031%

Dr Cheng Wai Chee, Christopher 2,875,786 – – 2,875,786 0.074%

NWD(Ordinary shares)

Mr Cheung Chin Cheung 124,400 – – 124,400 0.001%

Mr William Junior Guilherme Doo – 40,000(4)

– 40,000 0.000%

Mr Kwong Che Keung, Gordon 40,000 – – 40,000 0.000%

Notes:

(1) The shares were held by a company wholly owned by Dr Cheng Kar Shun, Henry.

(2) The shares were held by a company wholly owned by Mr Lam Wai Hon, Patrick.

(3) The shares were held by a company wholly owned by Mr Wil l iam Junior Guilherme Doo.

(4) The shares were held by the spouse of Mr Wil l iam Junior Guilherme Doo.



DIRECTORS’ INTERESTS IN SECURITIES (continued)

(b) Long position in underlying shares – share options(i) The Company

The fol lowing directors of the Company had personal interests in options to subscribe for shares

of the Company:

Number of share options

Name Date of grantExercisable

period

Balance as at

01.07.2017

Grantedduring

the period

Exercisedduring

the period

Balanceas at

31.12.2017

Exerciseprice

per share(Note) HK$

Dr Cheng Kar Shun, Henry 9 March 2015 (1) 7,420,739 – – 7,420,739 14.120

Mr Tsang Yam Pui 9 March 2015 (1) 3,710,368 – – 3,710,368 14.120

Mr Cheung Chin Cheung 9 March 2015 (1) 3,710,368 – – 3,710,368 14.120

Mr Cheng Chi Ming, Brian 9 March 2015 (1) 3,710,368 – – 3,710,368 14.120

Mr To Hin Tsun, Gerald 9 March 2015 (1) 701,960 – – 701,960 14.120

Mr Dominic Lai 9 March 2015 (1) 701,960 – – 701,960 14.120

Mr Lam Wai Hon, Patrick 9 March 2015 (1) 3,281,368 – (541,000)(2)

2,740,368 14.120

Mr Kwong Che Keung, Gordon 9 March 2015 (1) 1,403,922 – – 1,403,922 14.120

Dr Cheng Wai Chee, Christopher 9 March 2015 (1) 1,403,922 – – 1,403,922 14.120

Mr Shek Lai Him, Abraham 9 March 2015 (1) 1,403,922 – – 1,403,922 14.120

Mr Lee Yiu Kwong, Alan 9 March 2015 (1) 1,403,922 – – 1,403,922 14.120

Notes:

(1) 60% of the share options granted are exercisable from 9 May 2015 to 8 March 2020 while the remaining 40% of the

share options granted are divided into 2 tranches exercisable from 9 March 2016 and 9 March 2017 respectively to

8 March 2020.

(2) The exercise pr ice was HK$14.120 per share. The weighted average closing pr ice of the shares of the Company

immediately before the dates on which the share options were exercised was approximately HK$15.982 per share.

(3) The cash consideration paid by each of the directors for the grant of share options was HK$10.

(ii) NWDUnder the share option scheme of NWD, the holding company of the Company, the fol lowing

director of the Company had personal interest in options to subscribe for shares of NWD. Details

of the share options of NWD granted to him are as fol lows:


Name Date of grantExercisable

period

Balance as at

01.07.2017

Granted during

the period

Exercised during

the period

Balance as at

31.12.2017

Exercise price

per share(Note) HK$

Dr Cheng Kar Shun, Henry 10 June 2016 (1) 10,675,637 – – 10,675,637 7.540

3 July 2017 (2) – 2,000,000 – 2,000,000 10.036

Notes:

(1) Divided into 4 tranches exercisable from 10 June 2016, 10 June 2017, 10 June 2018 and 10 June 2019 respectively

to 9 June 2020.

(2) Divided into 4 tranches exercisable from 3 July 2017, 3 July 2018, 3 July 2019 and 3 July 2020 respectively to 2 July 2021.

(3) The cash consideration paid by the director for each grant of the share options was HK$10.




(c) Long position in debentures(i) New World China Land Limited (“NWCL”)

The fol lowing director of the Company had interest in the debentures issued by NWCL, a fel low

subsid iary of the Company, which inc luded the RMB3,000,000,000 5.50% bonds due 2018,

the US$900,000,000 5.375% notes due 2019 under i ts US$1,500,000,000 medium term note

programme, and the US$600,000,000 4.75% guaranteed notes due 2027. Detai ls of his interest

in such debentures are as fol lows:

Amount of debentures in RMB

Approximatepercentage to

the total amount of

debentures

NamePersonal interests

Family interests

Corporate interests Total

in issue as at31.12.2017

Mr William Junior Guilherme Doo – – 33,756,000(Note)

33,756,000 0.305%

Note: The debentures were held by a company wholly owned by Mr Wil l iam Junior Guilherme Doo of which RMB12,256,000

debentures were issued in US$ and had been translated into RMB using the rate of US$1 = RMB6.128.

(ii) Fita International LimitedThe fol lowing director of the Company had interest in the US$750,000,000 7.00% guaranteed

bonds due 2020 issued by Fita International Limited, a fel low subsidiary of the Company. Detai ls

of his interest in such debentures are as fol lows:

Amount of debentures in US$

Approximate percentage to

the total amount of

debentures


Family interests




3,000,000 0.400%

Note: The debentures were held by a company wholly owned by Mr Wil l iam Junior Guilherme Doo.




(c) Long position in debentures (continued)(iii) NWD (MTN) Limited

The fol lowing director of the Company had interest in debentures issued under the medium term

notes programme of NWD (MTN) L imited, a fe l low subsid iary of the Company. Deta i ls of h is

interest in such debentures are as fol lows:



the total amount of

debentures


Family interests




2,000,000 0.071%


(iv) NWD Finance (BVI) LimitedThe fo l lowing director of the Company had interest in US$1,200,000,000 5.75% guaranteed

senior perpetual capital securit ies issued by NWD Finance (BVI) Limited, a fel low subsidiary of

the Company. Detai ls of his interest in such debentures are as fol lows:



the total amount of

debentures


Family interests




1,310,000 0.109%


Save as d isc losed above , as a t 31 December 2017, none o f the d i rec to rs o r ch ie f execut i ve o f the

Company had or was deemed to have any interest or short pos i t ion in the shares, under ly ing shares

and debentures of the Company and any of its associated corporations as defined in the SFO that were

required to be entered into the register kept by the Company pursuant to Section 352 of the SFO or were

required to be notif ied to the Company and the Hong Kong Stock Exchange pursuant to the Model Code.



SHARE OPTION SCHEMEDuring the Current Period, movement of share options granted by the Company under the Share Option

Scheme is as fol lows:

(1) Details of the movement of share options granted to directors of the Company are disclosed under the

section headed “Directors’ Interests in Securit ies” above.

(2) Detai ls of the movement of share options granted to other el igible participants are as fol lows:


Date of grantExercisable

period

Balanceas at

01.07.2017

Grantedduring

the period

Exercisedduring

the period(2)

Lapsedduring

the period

Balanceas at

31.12.2017

Exercise price

per share(Note) HK$

9 March 2015 (1) 20,603,011 – (5,698,687) – 14,904,324 14.120

Notes:

(1) 60% of the share options granted are exercisable from 9 May 2015 to 8 March 2020 while the remaining 40% of the share

options granted are divided into 2 tranches exercisable from 9 March 2016 and 9 March 2017 respectively to 8 March 2020.

(2) The exercise price was HK$14.120 per share. The weighted average closing price of the shares of the Company immediately

before the dates on which the share options were exercised was approximately HK$15.822 per share.

(3) The cash consideration paid by each el igible participant for the grant of share options was HK$10.

SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN SECURITIESAs at 31 December 2017, so far as are known to the directors, the fol lowing parties (other than a director

or chief executive of the Company) were recorded in the register kept by the Company under Section 336

of the SFO as being directly or indirectly interested or deemed to be interested in 5% or more of the issued

share capital of the Company:

Approximatepercentage

to the issuedshare capital

of the CompanyNumber of shares

Beneficial CorporateName interests interests Total as at 31.12.2017

Cheng Yu Tung Family (Holdings) Limited – 2,477,530,362 (1)

2,477,530,362 63.62%

Cheng Yu Tung Family (Holdings II) Limited – 2,477,530,362 (2)

2,477,530,362 63.62%

Chow Tai Fook Capital Limited – 2,477,530,362 (3)

2,477,530,362 63.62%

Chow Tai Fook (Holding) Limited – 2,477,530,362 (4)

2,477,530,362 63.62%

CTF Enterprises 97,034,424 2,380,495,938 (5)

2,477,530,362 63.62%

NWD 1,588,468,276 792,027,662 (6)

2,380,495,938 61.12%

Mombasa Limited 718,384,979 – 718,384,979 18.45%



SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN SECURITIES (continued)Notes:

(1) Cheng Yu Tung Family (Holdings) Limited held approximately 48.98% direct interest in Chow Tai Fook Capital Limited (“CTFC”) and

was accordingly deemed to have an interest in the shares deemed to be interested by CTFC.

(2) Cheng Yu Tung Family (Holdings I I ) Limited held approximately 46.65% direct interest in CTFC and was accordingly deemed to

have an interest in the shares deemed to be interested by CTFC.

(3) CTFC held approximately 81.03% direct interest in Chow Tai Fook (Holding) Limited (“CTFH”) and was accordingly deemed to have

an interest in the shares deemed to be interested by CTFH.

(4) CTFH held 100% direct interest in CTF Enterprises and was accordingly deemed to have an interest in the shares interested by or

deemed to be interested by CTF Enterprises.

(5) CTF Enterprises, together with its subsidiaries, held more than one-third of the issued shares of NWD and was accordingly deemed

to have an interest in the shares interested by or deemed to be interested by NWD.

(6) NWD held 100% indirect interest in Mombasa Limited and was accordingly deemed to have an interest in the shares held by

Mombasa L imited in the Company. NWD was a lso deemed to be interested in 2,979,975 shares held by F inancia l Concepts

Investment Limited, 35,331,354 shares each held by Hing Loong Limited and Fine Reputation Incorporated respectively, al l of them

being subsidiaries of NWD.

(7) Al l the interests stated above represented long posit ions.

Save as disclosed above, there was no other interest recorded in the register that was required to be kept

under Section 336 of the SFO as at 31 December 2017.

EMPLOYEES AND REMUNERATION POLICIESAs a t 31 December 2017, approx imate ly 28,000 s ta f f were employed by ent i t i es under the Group’s

management o f wh ich approx imate ly 11 ,000 s ta f f were employed in Hong Kong. Tota l s ta f f re la ted

costs including provident funds, staff bonus and deemed share option benefits but excluding directors’

remunerations during the Current Period were HK$2.557 bi l l ion (2016: HK$1.510 bi l l ion). Remuneration

packages including salaries, bonuses and share options are granted to employees according to individual

performance and are rev iewed according to general market condit ions every year. Structured tra in ing

programmes were provided to employees on an ongoing basis.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIESNeither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company’s

l isted securit ies during the Current Period.

Dr Cheng Kar Shun, HenryChairman



Corporate Information(as at 26 February 2018)

Board of DirectorsExecutive DirectorsDr Cheng Kar Shun, Henry (Chairman)Mr Tsang Yam Pui (Chief Executive Off icer)Mr Cheung Chin CheungMr Cheng Chi Ming, BrianMr Mak Bing Leung, Rufin

Non-executive DirectorsMr To Hin Tsun, GeraldMr Dominic LaiMr Lam Wai Hon, PatrickMr Wil l iam Junior Guilherme Doo

Independent Non-executive DirectorsMr Kwong Che Keung, GordonDr Cheng Wai Chee, ChristopherThe Honourable Shek Lai Him, AbrahamMr Lee Yiu Kwong, AlanMrs Oei Fung Wai Chi, Grace

Board CommitteesExecutive CommitteeDr Cheng Kar Shun, Henry (Chairman)Mr Tsang Yam PuiMr Cheung Chin CheungMr Cheng Chi Ming, BrianMr Mak Bing Leung, Rufin

Audit CommitteeMr Kwong Che Keung, Gordon (Chairman)Mr Dominic LaiDr Cheng Wai Chee, ChristopherThe Honourable Shek Lai Him, AbrahamMr Lee Yiu Kwong, Alan

Remuneration CommitteeThe Honourable Shek Lai Him, Abraham (Chairman)Mr Tsang Yam PuiMr Kwong Che Keung, GordonDr Cheng Wai Chee, Christopher

Nomination CommitteeDr Cheng Kar Shun, Henry (Chairman)Mr Tsang Yam PuiMr Kwong Che Keung, GordonDr Cheng Wai Chee, ChristopherThe Honourable Shek Lai Him, Abraham

Sustainability CommitteeMr Tsang Yam Pui (Chairman)Mr Cheung Chin CheungMr Cheng Chi Ming, BrianMr Dominic LaiMr Lam Wai Hon, PatrickMr Wil l iam Junior Guilherme DooMr Lee Yiu Kwong, AlanMrs Oei Fung Wai Chi, GraceMs Lam Yuet Wan, El inaMs Tang Cheung Yi

Company SecretaryMr Chow Tak Wing

Registered OfficeClarendon House2 Church StreetHamilton HM 11Bermuda

Head Office and Principal Place ofBusiness28/F, New World Tower18 Queen’s Road CentralHong Kong

Principal Share Registrar andTransfer OfficeMUFG Fund Services (Bermuda) LimitedThe Belvedere Building69 Pitts Bay RoadPembroke HM08Bermuda

Branch Share Registrar andTransfer Office in Hong KongTricor Standard LimitedLevel 22, Hopewell Centre183 Queen’s Road EastHong Kong

AuditorPricewaterhouseCoopersCertif ied Public Accountants22/F, Prince’s Building, CentralHong Kong

Principal BankersBank of America, N.A.Bank of China (Hong Kong) LimitedBank of Communications Co., Ltd. Hong Kong BranchBNP Paribas Hong Kong BranchChina Construction Bank (Asia) Corporation LimitedCrédit Agricole Corporate & Investment BankDBS Bank Ltd. Hong Kong BranchHang Seng Bank LimitedMizuho Bank, Ltd. Hong Kong BranchOversea-Chinese Banking Corporation LimitedScotiabank (Hong Kong) LimitedStandard Chartered Bank (Hong Kong) LimitedThe Bank of Tokyo – Mitsubishi UFJ, Ltd. Hong Kong BranchThe Hongkong and Shanghai Banking Corporation Limited

Websitewww.nws.com.hk

Note: Mr Mak Bing Leung, Ruf in has been appointed as a member of the Sustainabi l i ty Committee of the Company with effect from

1 March 2018.

Where the English and the Chinese texts conflict, the English text prevails.

This interim report is also available atwww.nws.com.hk.

©NWS Holdings Limited 2018Conc

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NWS Holdings Limited takes every practicable measure to conserve resources and minimize waste.This interim report is printed on FSC™ certified paper using chemistry free plate system and soy ink.The FSC™ logo identifies product group from responsible forestry in accordance with the rules of the Forest Stewardship Council®.

NWS Holdings Limited(incorporated in Bermuda with limited liability)

28/F New World Tower18 Queen’s Road CentralCentral, Hong Kong

Tel : (852) 2131 0600Fax : (852) 2131 0611E-mail : [email protected]

www.nws.com.hk

Connecting Lives Building Futures

Interim Report 2017-2018

NWS HOLDINGS LIMITEDSTOCK CODE: 659

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